I'm not sure I know.
Immdoing it this way because the appliqué block in the beginners sampler quilt inhavent finished did it this way (did all the other blocks but avoided that one)
As far as I can tell it's so you don't have a raw edge on the right side because you can still see the stitching about a quarter inch in from the edge of the appliquéd piece.
I just don't know that I could machine sew the circles that well, and it's for a gift.