HChaCha20 is a pseudorandom function (PRF) based on ChaCha20 and HSalsa20. It takes a 512-bit input and produces a 256-bit output. This makes it suitable for fast key derivation from high-entropy input keying material, as done for XChaCha20.
You probably want BLAKE2b instead because it is much more flexible. Argon2idMUST be used for password-based key derivation.
Usage
DeriveKey
Fills a span with output keying material derived from high-entropy input keying material, a nonce, and an optional personalization constant for domain separation.