Fungibility is what makes a currency tradable as anyone would accept it knowing its no different from any other unit. So if someone did a drug deal with your dollars and you got the dollars later down the line because the drug dealer buys a cooldrink at your store the dollars are not tainted. Confidential transactions allow Bitcoin to keep that characteristic for example if we were sending BTC to a group in a country that doesn't allow funding to speak the truth it could be ceased if tracked or blocked but now the BTC is kept secret and the receiver can then use the BTC as they please

It makes BTC even more censorship-resistant