When you install SQL Server 2022 through the GUI, you will see an option in the features “SQL Server Extention for Azure”
This is more of a “how” than a “why.” Azure Arc-enabled SQL Server instances let you use Azure’s control plane (their graphs and some configuration options) to manage SQL Server instances, regardless of whether they’re actually in Azure or on-premises. That way, a DBA with one foot in both camps can have a consistent administrative experience for things like inventorying SQL Server instances.