The command you posted doesn't make much sense, since you typically don't use a loop device to mount physical devices, it's often used for mount ISO files.
At any rate one advantage to mounting 1 file system within another is the ability to blend a system's directory structure form a variety of sources.
For example, say you had a NAS (Network Attached Storage) that provided each user's home directory (
/home/<username>). This entire directory structure could be automounted into the existing directory structures of each of your systems, giving the appearance of being part of the local filesystem, all the while it's actually located on some distant remote server's disks.
This is one of the tenets that makes Unix extremely powerful in layering resources such as storage. The analogy to this in the Windows world would be mapping drive letters from UNC paths, which though is somewhat equivalent, is no where near as flexible or as powerful.
Mounting resources like this in Unix is tolerant to being relocated, can be load balanced, along with a whole host of other advantages.