1) It allows oil to be circulated, and oil pressure built up, without any of the stress on the rod bearings that a dry start would cause.
2) It reduces the load that the starter sees. Beginning a start with the compression released means that the starter is facing only the inertia of the heavy flywheel. Then a moment later the release is closed and that flywheel inertia helps push the crank through its first compression stroke.
Listen to the audio recording of a start at the bottom of my sig photo page. First it spins easily, then I drop the compression release and it stumbles through a partial compression stroke that was too lean to fire, then it fires on the first proper compression stroke. (If you play that in slow motion the stages are more obvious.) The old battery I was using at the time might have struggled through a few slow compression strokes before getting the crankshaft fast enough to fire, if I hadn't used the release.