> Just to create document fragments?

Largely, I think. Though I've not got around to actually using them yet myself, so take my understanding with a pinch of salt.

Compared to doing that with non-displayed HTML tags outside a template there are performance benefits (the parser deals with it differently knowing it isn't intended to be an active bit of DOM yet) and convenience benefits (IIRC the contents are not going to be picked up by querySelector/querySelectorAll).

Compared to building document fragments in JS they can be a lot more convenient to create and edit, and keep your design and code less tightly coupled (so a designer on your team who doesn't want to touch JS (or who you don't want messing with your JS!) can easily play with them to a certain extent). Other methods to achieve the same separation may involve an extra build step in deploying your work.