The standard medikit automatically treats open or unstable wound points with technomagical healing gel ("Second Flesh") and converts them into stable closed wound points which passively heal over time, regaining the lost HP.
If you use HD's manual bandages for some reason, your open wounds become unstable wounds, which later convert into closed wounds but do not heal over time. This stops the bleeding but doesn't passively regain the lost HP unless you're already in good condition. Normally the only way to heal these is magic, waiting a very long time, or exiting the level.
The trauma kit provides a minigame (sort of like the medical system in Metal Gear Solid 3) where it groups those old stable wound points into colorfully-named wounds with some arbitrary problems you need to treat. Using the traumakit tools to clear the statuses from the wounds (dirty, obstructed, tissue damage, etc) marks them to passively heal at an accelerated rate, so you can regain the lost HP.
Much like the other weapons in HD, you can hold the [Use] key with the trauma kit open to get a list of controls for working with wounds and tools.
