Basically you had two A/V outputs in a C64, the most common early method people used was RF (tv chan3/4 in North America) - if you used a standard TV, But the machine was provided with line out and s-video (before it was called that) outs through another DIN connector. Most people using C64s for audio use the latter. Or people that had Commodore monitors (C1701, C1702, C1084S etc)
Why would you use the heavily filtered one? To cut highs and be nostalgic I suppose.
I think only one preset uses it and its my take on BoC's roygbiv