Similar to the Bunker, the Pillbox is actually the ultimate defensive structure. Nothing can destroy it, not even multiple Naval Artillery rounds. Therefore, it is great to use it when you're under heavy artillery fire. It costs as much as a bunker, but is larger.
But it has a MAJOR drawback: Soldiers can't see the battlefield from inside it. That makes the Pillbox a good structure to keep a squad in.
However, the troops inside a Pillbox cannot survive a direct hit from a V1 rocket or a a German Flamethrower. If one of these comes into contact with units stored in the Pillbox, they will catch on fire. This isn't a glitch.
You can only build one pillbox per battlefield.
Some keep their signalers in it once they have high exp so they can call in support and not get killed (and have to get a new, slow calling signaler).
Warning: the hotkey is currently FUBARED (F***ed Up Beyond All Repair) and will crash your game. Deploy it with the mouse only! However, Urb said that this will be fixed in version 2.2.7