The key is used to release the two metal 'bands' which hold the wooden grip to the black frame. If I remember right you can slacken off the two bands and turn the grip and hotshoe to a different angle but it does not allow any bounce facility. I hope this helps, I've not used one for a little while.
looking at mine it seems you need the key (well not really) to take the strap off but then you need a small spanner wrench (what the US thinks is a spanner) to loosen the bands.
Dennis