By fixing the back axle laterally in place, it stops the body of the car being able to move from left to right over the axle. This removes all feeling of flex and looseness at the back end, allowing you to corner more efficiently without the ride becoming harsh or bumpy.
As the rear axle is now unable to move from side to side, you also have the option to fit wider tyres without encountering tyre rub on the inner arches.