Some teachers want to give each question a 'Weight'. Rather than every question get 1 point, they give some questions 5 (Marked out of..), some as 3. Then the "Total of marks" will be any number like 13 or 31. Now, if you give the 'Maximum grade' to 10, Moodle will calculates and convert every student's grade to a percentage of 10. It is so easy and clever. As Steve said, you can change the 'Maximum grade' any time, the grade book will reflect your change instantly.
You can get same results by using the 'Multiplicator' , or use the 'Weight', or use 'Total Calculation' in Grade book.
The problem is Moodle has too many functions to do the same thing.
For me, I misunderstood the 'Maximum grade' at first. I thought if someone got 13, someone got 31, both will be capped to 10. Actually, one will get (13/31=42%) 4.19 points, one will get (31/31=100%) 10points.
It might be less confuse if the word: 'Maximum grade' can be changed to 'Weight'.
This is just my thought.