There are various digital radio networks that have backbones on the internet, such as DMR MARC, Brandmeister and TGIF, but come out on local repeaters all over the world.. Tradionally, to access these networks which give you talkgroups you needed a local repeater to do so.
Consider this example that applied in my area til recently:
Local hams want to get on the nationwide, statewide or other talkgroups, but we had no capable local repeater. The hotspot lets you take your own radio and the hotspot acts like a repeater connected to the internet.
More concretely, if hams without a repeater with network access want to access the networks they need a hotspot. For example, someone wants to access their statewide Brandmesiter talkgroup, but either don't have a local capable repeater or they don't want to tie it up; all they need is this hotspot and their own DMR HT.