That limitation is why to this day, I have no idea what non-chip ram is even for. I always assumed that is 512 isn't enough for a game that requires 1 megabyte, it would dip into the extra ram you installed. To this day, I am still stinkin confused about this.
It's simple: Many games that require one megabyte, need the extra memory, but they only need 512 kilobytes of chipmem.
What's that 512 kilobytes of non-chipmem used for? Everything that doesn't have to be in chipmem, such as program code, level data, the non-sample part of the music, tables, etc. This leaves more chipmem available for graphics and samples, and at the same time you don't need one megabyte of chipmem (and thus you don't need a fat Agnus).
All this leads to games that run on more machines, because all the A500s can have 512 kilobytes of trapdoor memory, but not all of them have a fat Agnus. Also, the ones that do have a fat Agnus have to be modded.