It's for when you say, remove a game in the middle of the game list and want to add another one. If you don't optimize you'll have less space available because of the way Disk Writer handles space. From what I can tell, it needs the data to all be clumped together in one consecutive space so if you erase a 2 GB game(when it's not the last game on the list) and then add a 3 GB game, the 3 GB game doesn't actually take up any of the space that the 2 GB game used, that space gets ignored. If you want that space back to actually use, you'll have to remove all the games and add them all back.
But manually adding all the games back one by one while backing up save data is a pain in the ass so that's seemingly why the optimize feature exists. It automatically does all that for you. If you're just adding games for the first time, you don't need to bother with it since there shouldn't be any gaps in normal circumstances.