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It used to be more popular than it seems to be now, but the main purpose I know of is to reduce copper fouling - I think to be really effective you need to deep clean the bore before switching to moly bullets and then stick to them. I've also seen reports that they raise pressures somewhat, so the same load with a moly bullet should be reduced a bit and worked back up.
I've cleaned a couple of rifle bores in which both moly and bare bullets were shot through together; to me they seemed to be much more difficult to get clean so I've generally avoided them. But I'm sure someone has used them with good results.
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