It shows if the candidate has seriously considered what the company does, how it operates, and what would mean for them to join the company.

It also helps the interviewer take stock of what the candidate is looking for. If the candidate does well they can circle back to those interests and sell the candidate on the company a bit.

I always have a bunch of recruiter spam in the backlog whenever I want to switch jobs. And when I get that question I push back with something like 'You contacted me, I'm exploring opportunities in a couple of places so.. why should I want to work at your company?'

I recently helped interview 4 internal candidates for 2 openings on my team. One question I asked all of them is "how do you feel this job will contribute to your personal development/career?" It makes a huge difference if you can answer this question, because it's totally possible to get candidates who don't actually want the job but are just applying as a matter of course. Then they may struggle in the job or leave. You want someone motivated to do the job, you really do, or you will be doing them and yourself a disservice.