It's not used super often but that wouldn't affect in terms of compatibility with other people's wallets. It's basically a medium to get you able to accept lightning transactions without having to set up channels, and without relying on a single point of failure for custody.

In the background there are swaps done from lightning to liquid, making it all seamless. You can send to/receive from anyone with a lightning wallet, but in your wallet you hold Liquid BTC.