Catchall domains accept any mail to any email address at that domain. They were quite common, particularly at smaller domains, a long time ago. For various reasons, most of them having to do with spammers, they’re less common now.
Most folks think catchall domains are only used for spamtraps. As a consequence, many of the address verification tools will filter out, or recommend filtering out, any address that goes to a catchall domain. They test this by trying to send emails to random addresses like firstname.lastname@example.org.
But not all catchall domains are used for spamtraps. Every client here at WttW gets a domain assigned to them and those domains are catchalls. Emails to those domains go into a database for analysis. Clients (and I!) can create any LHS on the fly to test signups, look at mail flows. Having a catchall means we don’t have to actually configure any address so I can test multiple signups and encode the data about the signup in the to: address.
This works most of the time, at least until verification services mark those addresses as bad and they don’t get imported into the client’s processes. We have some workarounds, and can still get mail despite the services making assumptions.