The Vitis Unified IDE workspace serves as an organizer for Vitis projects to keep track of project settings, source code and build recipes including constraints and directives. You can choose to import source code either by copying the files into the workspace folder structure or as reference to a location you specify. When importing without copying the files, the workspace serves as managing the project settings and build recipes, but the files remain at their original location. This is practical when source code is shared among several projects and handled separately by SCM tools.
The benefit of using the Vitis Unified IDE is that the workspace automatically detects changes to source files and prerequisite settings, and calls rebuilding Vitis components dependencies.
Details on using the IDE can be found in Using the Vitis Unified IDE in the Vitis Reference Guide (UG1702).