The Identify Chord action analyzes selected notes and adds a chord symbol that reflects the basic chord structure of the selected notes.
For example, if you've selected an F, E-flat, A and C, the analysis would conclude that the 4 notes are part of an F7 chord.
Note that this action treats all of the notes selected as one chord for analysis. This allows you to analyze notes that dont share the same start time, which can be important for compensating for chord anticipations, suspensions, or appoggiaturas.
To analyze chords, simply draw an rectangle around the notes and click on "Identify" in the main tab "Notes":
You double click on your selected notes and choose the action from the drop down menu of the Properties Pallet.