It keeps some of the combustion products away from the seals. Stihl was thinking along the right lines when they tried the shielded bearings in the larger saws, but they
made the mistake of having both shields in which trapped fine sawdust in the bearing itself, leading to failures. Their thinking was that the shields would keep fine sawdust
out of the bearings.
My long term testing in my own saws has yielded excellent results. My back-up saw is going on six years with the set-up and the seals are doing great (aftermarket seals at that). It has about 300 hours run time.