Definitely more for commuting or bike paths. If I'm coming up to a road or traffic lights I sometimes want the motor to cut out *now*. Most pedal assist systems have a delay between stopping pedalling and the motor cutting out which keeps things smooth. However there are times when you need to...
The switch would be for eBike motor cut out, its neater than the stick on switches needed when using most other hydraulic brake systems. I'm surprised its not offered by more manufacturers. Its easy to find in cable type levers