Hi Alex,
While I'm not very familiar with that code, I also had a look and agree with your observation. I wanted to check if maybe it was used to regularize the data cov matrix, but no, the same process is used with the data cov instead. On the other hand, looks like the function computes noise covariance regardless and wouldn't run if it was missing.
I guess the noise cov could still be used at some point to produce Z scores, but that's not in the inverse function.
Cheers,
Marc