It was supposed to be capable of projecting very realistic-looking images in the sky. People supposed it would be used to simulate an alien presence. Supposedly bluebeam illusions would also be accompanied by voices that everyone would hear inside their head in their own language, making the illusion very convincing to the unsuspecting. Over the years various different technology has been surmised for Project Bluebeam.
Search the web if you want to learn more about it. I shouldn't be answering something you can easily learn by searching.