Where user accounts reside in centralized database like ldap, SQL, NIS, NIS+ or other databases, from which user and groups are imported to other systems. To create, for example home, group directories in those systems which import these accounts from centralized database, on demand.
To exploit its transparent backup feature for 24*7 online systems.
It can be also used even when accounts are in a local system, to some extent hiding what accounts exist in /home directory, for example.