It is basically like a faucet for certain people basically. There are requirements of course like you said so it is not totally free money and you should be able to do reach it only after you have been here for a while and did some stuff but basically after all of that is reached it becomes like a faucet, there are still to this day few places that give you free money (like namesake freebitco.in) and this is basically something similar to that where you get free money for being a good gambler here.
Well, I have been a player at Bitsler for a while now so I will gladly answer the question.
Nitro is kind of a faucet that depends on your wager and more importantly, your losses since the last nitro was set. If you had a big loss, you will likely get a huge nitro and maybe some chests if you ask the support about it.
That is the simplest way to explain it, you get to gamble with the casinos money for a while after you reached a certain level but it is a low amount so people who enjoy gambling here do not look at that as a solution or a way to make money but look at it as the thing you do while you are waiting for your next deposit to come through so that you can gamble properly.
True. It's sort of a bonus that keeps you visit the same casino which helps both the player to manage during the time he can't make a deposit and the casino because it retains the player. The casino cannot offer everyone the same bonuses because then it can be abused.