They were sometimes deployed for "incoming calls only" as used by certain service desks, but more often when directly connected to a particular end point. In this case lifting the handset would immediately signal the local Switchboard Operator (or perhaps other designated number) in a large building. These use cases have included situations where the public might have access, but not the right to call anyone e.g. behind a panel in a lift ("elevator") for emergency use. At some point the function became known as "hotline" in certain PBXs.
Going back a little further it was common not to have a dial at all, with the operator being signalled immediately, literally patching your call manually through a series of other locations.
It's an attempt to make the phone receive-only, a cost cutting measure.
I know about the switchhook trick from friend's father who actually used it to bypass this measure on a phone installed at his military unit during the mandatory military service.
Going back a little further it was common not to have a dial at all, with the operator being signalled immediately, literally patching your call manually through a series of other locations.