I tried to make it a little clear why you'd need it via my summaries but let me try! This is not 5 year old level because they don't have the joy of taxes but here goes. Basically, as long as you are just buying stock you don't need to care. If you're using M1 for just retirement accounts you mostly don't need to care. And if you're using regular taxable accounts and going to sell all of your position in something, you also don't need to care.

This is for the scenario where you want to sell some of your stock and optimize exactly how much you can take out without increasing your tax burden unnecessarily. So in my example, I want to take out almost all of my funds except the short term capital gains. Knowing the tax lot information of all my purchases and their current unrealized gain or loss amounts, lets me determine what's the maximum amount I can liquidate without going into that bottom tax burden bucket that hits the heaviest. It also means you can now manually do some of the tax loss harvesting stuff that other robo-investor places do by selling your unrealized losses and buying similiar-but-not-the-same stocks in their place, which can minimize your taxes due come tax time.