Determine the relative postion of a Chip to another one
It looks to me as though it works something like this:

Controller turns on it's EDGE pin and then broadcasts a message out from it's UART saying 'whoever can see an incoming EDGE signal, respond to me' - and CHIP1 responds. It's response probably indicates that it's seeing EDGE on its Port 1.
Controller then disables its own EDGE pin and tells CHIP1 to turn on its EDGE pin on its Port 2, then broadcasts another 'whoever can see an incoming EDGE signal, respond to me' - and CHIP5 responds. It's response probably indicates that it's seeing EDGE on its Port 4.
Then, depending on the preference of the designer, Controller could either tell CHIP5 to enable EDGE on its Port1, send a broadcast, get no response, tell CHIP5 to enable EDGE on its port1, get no response, etc...
Or it could instead go back to CHIP1 and tell it to enable EDGE on its Port3, send a broadcast, and get a response from CHIP2, etc
and then continue on throughout the matrix of devices until it's enabled EDGE on each port of each CHIP it discovers and knows that it's discovered the entire matrix.

About 8 years ago I did something similar - my bus was 1Mbit RS485 (although discovery took place at a much slower baud rate), and instead of an extra 'EDGE' pin I had a bus switch on each port which I could selectively enable and disable until I had discovered the matrix of devices.