It's useful for smaller servers. Basically, the only remote content that a fediverse instance sees is content produced by a remote account that a local account is subscribed too. So the more users subscribing to remote content, the more content that everyone sees. But in small servers, without a huge amount of incoming content, it can be hard to get a broader view of the fediverse.

This is a way for people on smaller fediverse instances to pull in broader content, because anything that tags.pub sees with the hashtag, gets pushed to your local server.