The Schedule action lets you set up action "branches" based on time of day. This is useful to route traffic differently if you expect (or don't expect) agents to be available based on the time of the call.
To set a schedule, add an action to the canvas and connect it from the Schedule action. Notice the small rectangle on the connector arrow; this is where you set the time range for this action branch.
Schedules run in a rolling 24-hour period, so you can set your start and end times for any period. For example, you might set one action as your "Business Hours" schedule branch to run from 8 AM to 6 PM, and an "After Hours" Branch from 6 PM to 8 AM.
The Default selector in the schedule branch options is useful in case there's ever gaps in your scheduled times. For example, let's say you accidentally forget to include a time range that covers 4 AM to 7 AM. If a call were to arrive in that time period, the system would know that even though there's not a specific schedule branch for that time, it should use the default branch logic you've identified.