In this instance it is to enable use of any TCP client, namely ones that do not support TLS, e.g., original netcat, tcpclient or an early version of a text-only browser. I use a variety of clients and with only one exception I only trust the proxy to make remote TLS connections. If one uses a client with acceptable TLS support, then there is no need for a TLS proxy.
Note I am referring to a local proxy, listening on the loopback device and under the control of the user, not one listening on a network interface connected to the internet and certainly not one operated by a third party as a "service".
shameless plug: see autossl.so[1]. it is not a proxy per se, but an LD_PRELOAD-able lib which upgrades plain socket connections to TLS for applicaitions which does not support TLS themself (or using too old SSL versions).