What is the "Templates" folder in the home directory for?

For as long as I can remember, every time I install Ubuntu there is a folder in the home directory called "Templates." I've always just deleted it, but I'm curious: what's it supposed to be used for, and why is it in the default install?

If you drop any files in this folder, for example

then when you right-click and create a new document, you can select any of these files as a basis for the new file - i.e. a template.

For as long as I remember, this has always been a standard feature on many desktops such as Gnome.

If you have deleted the folder and need to restore this functionality:

gedit ~/.config/user-dirs.dirs

Check that there is a line containing the following - if not, add this line.

XDG_TEMPLATES_DIR="$HOME/Templates"