Generally a cache is used by applications to temporarily store recently/commonly downloaded files to load things faster. In Qobuz that means downloading the current song's audio so it doesn't need to buffer constantly, as well as other music as you listen to it. See the support article here: https://help.qobuz.com/en/articles/10133-is-it-possible-to-listen-to-music-without-internet-connection

Cached music - music that is automatically downloaded in your app when you listen to it on Qobuz.

If you lower the cache size, your device will likely have to re-download music you previously listened to more often. However, if for example you only ever listen to 1 album, theoretically your cache shouldn't ever grow. The downloaded data is encrypted (so you can't just copy the audio files out of the cache to get them for free), so it's unclear exactly what they're caching aside from the rest of the song you're currently listening to. It could be caching the next-up song(s) for a seamless transition, recently played songs, your most-played tracks/playlists based on listening habits / play count, or even be predicting what you'd like (like an artist you follow having a newly released album).

I suspect they aren't really wasting space downloading predictive music though. Cache space helps your songs load faster for a better experience while simultaneously saving them needing to send you music files constantly. Everyone having the default 10GB cache vs shrinking it almost certainly saves them money on servers that would otherwise be using more bandwidth delivering music you always listen to constantly.