It's nice to have the option to redevelop files with less highlight DR if the initial result looks too flat.
Obviously, in the age of isoless photography, we sometimes shoot on the safe side, playing it "too safe" by choosing DR400% when DR200% or maybe even DR100% would have given us a more pleasing result with "crisper" highlights.
Of course, the DR function is here so we can avoid exposing on the highlights. Instead, we can expose on the shadows, count "clicks" with the exposure compensation dial (to determine the difference between the correct exposure on the highlights vs. the correct exposure on the shadows, as described in my X-E2 ebook), then pick the appropriate DR setting. Adaptive ISO is such a great feature, but we don't need it for every single image (otherwise, Fuji could just use a fixed DR400% factory setting). So if the result looks too flat, we can reprocess the image with a less adaptive DR setting.
In the X20, picking DR400% simply means that the shadows are processed with (as least) ISO 400 and the highlights with (at least) ISO 100, with midtones and everything else occupying the ISO space in between. It's a tone-mapping curve. Fuji cameras are the only cameras on this planet offering 2 EV of adaptive ISO space, beating every other camera from every manufacturer in this regard. So even Nikon, Pentax, Sony, Leica and other camera makers that are also using ISOless sensors (mostly from Sony) can't really match what Fuji brings to the table.