The purpose of CryMonoBridge is to load and handle the Mono runtime for the execution of .NET based modules. As such, it is an integral part of the C# Framework which allows for the development of C# based CRYENGINE games. Removing CryMonoBridge will entirely remove execution of any .NET content from the engine.
When CryMonoBridge is executed by the engine, it loads all specified .NET plugins as a ManagedPlugin from the cryproject-file which is located in the root folder of your project. When the plugin initializes it will call ScanAssembly() on the Engine class of the core-assembly. This will register every EntityComponent and BehaviorTreeNode. Once everything is registered it will call the Initialize() method on the first class that inherits from ICryEnginePlugin. Messages such as Shutdown, and OnGameStart are all send to this plugin later on.
C# API Reference