I think it's if you want to transfer your old town's characters into a new town if you have multiple copies of the game. You could do this from Wild World to City Folk as well.
If you have another copy of the game that hasn't been started yet, then you can move any of your non-mayor characters to be the mayor of that copy of the game.
It's a useful feature in some cases. For example, my sister shares my copy of ACNL and has a villager in my town even though I'm mayor. If she ever got her own copy of the game, she could transfer her character over.
What they said! It was super helpful when I got a second copy of ACNL for my boyfriend and he was able to move his character out of my town and into his new game. It definitely comes in handy