1) It is a short-hand tool for the DM to describe the broad values of an NPC.
2) Likewise, it is a short-hand tool players use to signal to the DM how they want to play their characters. The DM can take this into consideration as they plan adventures.
3) The player has written down confirmation of their character's standing.
4) It sets the scene for Spells and effects to interact with aligned PC/NPCs in appropriate ways.