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In brief: Steam's library overhaul was scheduled to go live this month and indeed it has, with a public beta that anyone can opt-in for with just a few clicks and client restart(s).
Steam's long overdue library update has finally arrived in public beta, and now you can play, organize and scroll away at your massive (or small) collection of titles accumulated over the years through a much more streamlined experience.
As noted previously, the update includes a new "Home" page and "Dynamic Collections" among other major features and subtle tweaks to the client. The Home page serves as a news feed for titles in the library and displays friends' activity, recently played games and configurable game shelves further below.
The Steam library is getting a makeover to make it better looking, more relevant and more powerful than ever before.--- Steam (@steam_games) September 17, 2019
The New Steam Library beta is live now and everyone is invited! https://t.co/2xZ1w8xMNm
Dynamic Collections (identified by a thunder/flash icon) help in reducing clutter and organize games with minimal input (though improperly user-tagged games do show up now and then), something that can be avoided by making offline/disconnected collections.
To try out the public beta for yourself (and the caveats that come with it), click Settings from the Steam dropdown and under Account (selected by default) click on the "Change" button in the Beta participation section and choose "Steam Beta Update." Restart the Steam client through the pop-up that follows and get ready to greet your shiny new Steam interface.