It does nothing drastic at this stage. Valve temper expectations in the documentation, noting that "We are now accepting a limited amount of games into the service as we continue to build features and server capacity for players. The first service we are connecting to Steam to allow users to play games from their Steam Library from the Cloud is Nvidia GeForce Now."
GeForce Now is Nvidia's game streaming service, launched this February. For a monthly fee, its users can play their games remotely, using Nvidia's hardware, which streams the results live back to their device as they play. In a sense, it's renting a much better PC at a distance. Rather than providing a competing service, Steam Cloud Play basically connects Steam libraries to it directly, allowing users of both services to launch the games with less messing about. Valve also say that they "may add additional Steam Cloud Gaming services in future". Whether we'll ever see Stadia hooked up in the same way is anyone's guess. I am also curious how it will interact with Steam Remote Play, which uses streaming to let users to play local multiplayer games with non-local friends.
Assuming it works, it ought to be very intriguing to smaller developers who can't or won't deal directly with Nvidia. For players, having the the two services already linked is convenient. And it's a classic Valve-style middleman effort to make Steam an integral, de facto default of game streaming just as it already is for game distribution. It also makes obvious financial sense, helping them to sell fancy new games to people who can't afford to throw huge sums of money on a fancy new PC. If anyone can sell that argument to cautious publishers, it's probably Valve.
Whatever you think of Steam's influence, this is an interesting development, and it's better news than we've had to report lately about GeForce Now. Just this week, Nvidia switched to an "opt in" approach, so games whose publishers haven't committed will no longer be playable through that service. Since its launch, GeForce Now has seen multiple big name publishers pull most or all of their games, including Bethesda, Activision, and 2K Games. Big publishers can be a superstitious lot, prone to following suit, so seeing Valve support the service is surely the best news Nvidia have had all year.