That line is commonly used to strip out all the space separated tokens from $1, $2, $3, etc..., depending on how many tokens being used. The /tokenize command works somewhat similar to $gettok()
Let's take the nickname Froggie Da Frog
As you can see there's a space delimiting the aforementioned three words. So to tokenize it, you'll do:
//tokenize 32 Froggie Da Frog | echo -a $0 $1 $2 $3
$0 equals to the total amount of tokens presented.
$1 equals to the word "Froggie"
$2 equals to the word "Da"
and $3 equals to the last word "frog"
You can use $numtok() and $gettok() to simulate the tokenization:
//var %x = Froggie Da Frong | echo -a $numtok(%x,32) $gettok(%x,1,32) $gettok(%x,2,32) $gettok(%x,3,32)
I hope this gives you a better idea, if not too thorough, about what tokenize command does.
P.S. you'll sometimes see people use
//tokenize 32 blah blah blah | echo -a $*
aka tokenize loop to have the tokens output vertically.