This feature allows an extension user to receive another call while on the phone, so the user can answer important calls without missing it. And the first caller will be put on hold waiting till the user switching back.
You are talking to your customer about your business on the phone, and now your manager is calling you as well. You don’t know if it’s more important or not and you don’t want to miss the call. So you can tell your customer to wait on the phone and then answer your manager’s phone. Once you’ve answered the phone, you can simply switch back to your customer.