it periodically spawns hcs, lrms, and siege frigates at -all- your planets, it can be extremely annoying to deal with especially if your fleet is away or in a battle.
The problem is that it's a double-edged sword. If the enemy fleet is there defending, then killing these units is trivial and it can level up the enemy's capital ships. If this is a long and drawn-out game, this can actually end up being an advantage to your opponent if you aren't careful. That's why insurgency is generally considered a very questionable tech.
Annoying in the short-run, but in the long-run the enemy empire is going to need to starbase spam to defend against novaliths anyways at which point this ability is just a joke since it's no threat at all to a starbase.
The problem with the novalith is that starbases with the correct upgrade (auxiliary government for TEC, enduring devotion for Advent, and enforced loyalty for Vasari) can protect the planet. The novalith blasts will still kill population, but the enemy will keep control of their planets. The problem is that if you can afford a large number of Novaliths to deal serious damage, the enemy can afford a large number of starbases to protect against them.
The Advent deliverance engine gives your fleet extra punch in battle, allowing you to break stalemates and win the game. The Novalith can deal economic damage to the enemy, but it won't weaken their defensive position, so long-run it's not nearly as devastating as it may appear.