Remove status is used in parallel workflows - ie, when a document is in multiple states at once and you only want to remove a single state.
So you have a document in the following states - "state1" and "state2". When the state1 approver completed their approval, you remove "state1", leaving "state2". Only when both states are removed can the workflow advance to the next state.
I'm using that here on an IT Change Control system - after an initial serial approval step, the workflow branches into the following states; "Pending JDE", "Pending Notes", "Pending Domain", "Pending Hardware" etc. Each of these states have different approver/processors so the request gets routed as required to the teams in parallel. As each approver completes their setup, that state is removed (and ultimately the requester can see what remains to be provisioned on the request). When all the states are removed, the status is automatically advanced to "Completed".
HTH!