If you now have a sustain envelope with a looped sample, it will always sound untill a note-off is encountered.
With both a fade out and a sustain loop, you can make the note fade away slowly, and continue the envelope once a note-off is encountered.
This is very good to emulate piano's guitars, etc. , but also like a xyliphone. With a xyliphone, you make a sustain loop with a quick fade-out and a long after-sustain envelope. The logic behind this is: if you trigger a xyliphone, and keep the stick on the plate, the sound will be muted directly. But if you hit the stick with an immediate release, it will sound long.
I understand that you think like: well this is nice but what real value does this add? Well, considder that you want to play an instrument using your midi keyboard. Then you depend on note-off more than anywhere else. This is the perfect way to emulate these kind of effects.
Keeping the note pressed still lowers the volume slightly (or fast depending on your configuration) and when released, it fades out quickly, but not abrubtly, with the ability to generate some after-reverb like envelope.