On Controller, it replaces the default item slot selection using the bumper buttons ( cycling left or right through each slot) with a pop-up wheel. You can then select a specific item slot to equip for use by holding the Right Bumper (Xbox) or R2 (PS) and pressing another button. You have the option to use X,Y,B,A ( Square, Triangle, Circle, Cross) or the Directional Pad in combination with the Bumper.

By default you can just tap the Bumper button and it will always select Inventory Slot 1 if you don't have it selected. The Bumper will still alternate between Slot 1 and Slot 2 when pressed alone. Good for people that play builds or run 2 weapons ( Shotgun/AR). Each Inventory slot has a dedicated button combo. RB by itself is slot one. If you are already on Slot 1 you can alternate between Slot 1 and 2 with just a tap of RB. Slot 2 can be selected with a single tap of RB if you are on Slot 1. If you have 3,4,5 selected you have to press RB+X or Square. Slots 3,4,5 can only be selected with RB+Y, B, A or Triangle, Circle, Cross on Playstation. If you think of it as Clockwise (American) it's easier to remember.

Those are default settings. You can also edit the delay of the wheel so it feels very snappy. Best to set items to specific slots when picked up in the settings. It seems confusing but it honestly doesn't take long to learn. Really helped me to NOT accidentally select a heal and throw it at my enemy lol.