As you've discovered, Launch provides 3 code snippets for specific Environments: 1 for Development, Staging and Production. You are expected to implement the correct code snippet to the appropriate website. That is, you are expected to implement the Development snippet to your development site, the Staging snippet to your staging site, and the Production snippet to your production site.
Why is this important? Because if you look in the Publishing section of Launch, you will see that there are columns corresponding to each Environment. The first column corresponds to your Development environment, so any library indicated there will be available to your Development snippet. Likewise, when you build a library for Approval, then that library becomes available in your Staging snippet. Finally, when you publish a library, then that library becomes available in your Production snippet.
Analytics also uses these Environments to let you set your report suite. When you set your development report suite (e.g. orgreportsuitedev) in the Development part, then when Launch runs from the Development snippet, Analytics knows that it should send data to your development report suite orgreportsuitedev. And so on for Staging and Production.
Note: you can, of course, use your Launch Production snippet in your development or staging site. But the consequence is that when Analytics gets executed, it sends data to the report suite that you've specified for Production because you're using the Production snippet.
Hope that helps to clarify how it works.
