The automation feature allows you to add or remove tags depending on the candidate's status - typically, you want to add a certain set of tags when creating a candidate's response to a specific position, and vice versa, remove them when rejecting.
Another typical scenario is sharing with hiring managers or HR business partners - you only know that you are sharing the applicant if he or she passes the pre-screening - you can set this now and you don't have to deal with it manually.