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You don't have to use that if you are just working on one PC, Blender will still know where the files are even if you don't pack them into the file. Your file size will be smaller if you don't pack them into the .blend.
If you are working with the files across multiple PCs, using the cloud, sharing your file with other people, or you move the textures to another location on your PC, and the files are not packed into your .blend, then Blender won't be able to load the external files because it won't know where they are. Those would be cases where you'd want to pack the files into the .blend.