Use the pen size slider variable to set the size of the pen. The circle on the top left appears when you press space on a color like the color picker on the top right to show you what color you just selected. Use your mouse pointer or your finger to draw. Sadly, I haven't added an eraser tool as of 28/04/2022 So you need to click the green flag in order to erase everything.
Credit to griffpatch for the tutorial How to GET COLOR value at point | Scratch Tutorial