When you start flying, you want the control surfaces to move less, with more softness in the centre of the stick. Less control surface movement = more control. Low rates are also useful for landing where you really don’t want to over correct. Think of it as driving a car, your first lessons are usually at low speed, without fast turns or complex manoeuvres. Flying is the same. Low rates will stop you getting into really nasty trouble, as when combined with a bit of expo, they will result in a little more reaction time for a new pilot. You can also tune individual controls to move less, for example I turned my ailerons down lower than the low rates to help me when I was first flying the 4 channel wing on the TT.
However there are times when you want more control surface movement, for example when hand launching, or if you want to try some aerobatics. In this case having a switch which allows you to change is useful, as you can launch in high rates, then switch to low rates before turning or launch in low rates and switch to high for aerobatic practice then switch back to low rates for cruising round.
High rates are not the full available movement of the control surface, they are usually less than 100%. Sometimes you don’t get enough movement and need to adjust the physical linkage. High rates give you much more movement and will result in a “twitchier” feel on the sticks, which is exciting but can cause a few heart stopping moments when you are trying it for the first time, especially if you are heavy handed on the throttle.
The third position of the switch is just whatever movement is the full servo travel, sometimes with no expo.
Being able to drop the rates down again at the flick of a switch is very useful.