I think it is just something to use when it feels appropriate. The two main cues for me on when to use it are 1) if the current track is quite energetic and there could be a drop in energy when the next track goes in; 2) I can see the current track has an abrupt ending.
I think it is definitely to maintain the pace and energy but can also work against you if you are looping a track that takes a long time to gradually bleed out.
I remember when Uncle John was doing the Bunkers, I noticed he almost always uses loops and just uses the loop button that just loops 1 bar. Obviously his brand of prog benefits from long transitions though.
