As mentioned already, it is used mainly on ivory ferrules so when you replace the tip the actual ferrule is not sanded, prolonging the life of the ferrule.
In addition, some people may say it provides a softer hit, this is controversial among players & cuemakers, some agree some disagree. In my opinion, I think it does change the hit slightly, but many rep. cuemakers have told me it does not, of course then there is the mental aspect of it all.
Lastly, some players like them because they raise the tip higher, some cuemakers specifically put them on there because it makes the ferrule/tip look better (sales), even if its a melamine ferrule.