Here’s my go at a simplification:
Think of this RGB System as a way to create “memory palace objects”. What r30 is giving here is a structured way to come up with these objects to condense different visual bits of info you want to memorize.
Everyone else so far has gotten the central point right–the object of greatest importance should be at the center of the stencil / model / object. Everything else in r30’s original post is a complex way that he adds things to it.
I’ll explain by way of analogy. (Note: This analogy will only make sense if you generally understand both the major system and the PAO system.) Think of it like this: in the major system, we are given a formula to memorize numbers. In the PAO system, there’s a sense in which you come up with your own formula. What r30 is doing here is giving something akin to the PAO system, but for loci.
Another angle on this: If you learn to swing a baseball bat with good form, then you will be pretty good at improvising this skill to wreck other things with that bat–vases, windows, other bats, you get the point.
The point is, what r30 seems to be giving us is some guidelines on improvising our own hodgepodge objects based on things we want to memorize. If I understand correctly, this is like the linking method, but you make a new object with the things you’re linking together. This way, you don’t need an external memory palace (like your house, etc.)–you’ve made one by memorizing other things. If you need a visual, think of the game Katamari, where you have a big ball that sticks to everything. The RGB System is a (slightly) more organized way to stick things together and make what I called “memory palace objects”.