Yep, lemme break it down for you:

It doesn’t work.

Wait for them to patch the patch that will try to fix it. It's broken right now like a large portion of the stuff they added.

lol. completely agree with you.  Didn't even try because the tool tip made no sense.

You would think but then you do it and end up with a stat not included on any of the gems you have socketed.

I think when you use a material gem (rend, poison, physical) it chooses from a pool of offensive and defensive from the pool of possibilities from this kind of gem (material)

The wording in game is so piss poor i have no idea if there is a method to it. Can you target farm a certain stat via gem consumption?

Can anyone explain Gem Consumption mechanic on these reagents to me?