The first click sets the axis of rotation (wherever you click will be the point at which the object rotates around), the second sets the point from which you will rotate, the third finishes the rotation, text inputs can then be used to specify angle and number of copies.
See how the rotate tool is stuck to the endpoint after I make the first click and how the object is attached and can spin happily until I make the third click. Tapping ctrl toggles copy on and off.
