There are two options, and I guess I'm not clear which you're interested in.
1. The car logs onto your home WiFi network (or tethers to your cellphone via WiFi).
2. The car acts as a WiFi hotspot.
In the case of #1, it's as I mentioned above, to allow for your car to use another network in place of its built-in cell/data connection. On Volvos people have used it for Sensus map updates, etc., because that's faster than the cellular data connection. I haven't been able to play around with it in a Polestar, but I assume maybe you could do the same for downloading offline Google Maps more quickly than doing the same via the cellular data connection.
In the case of #2, I think that's obvious, but unless you're really trying to save on your phone's data plan, or your phone has lost cell connection (and the car still has it), or you have devices that don't have a cell connection, then I don't see the value in having this turned on.