Reinvestment is automatic and free of dealing costs, which removes the friction of manually reinvesting small dividends and eliminates cash drag between payment and redeployment.
Tax treatment varies and matters. In some jurisdictions the reinvested income is still taxable in the year it arises even though no cash was received, requiring the investor to track notional distributions and adjust cost basis accordingly. In others, and in tax-sheltered accounts, accumulation is simply the tidier option.
The accounting consequence to remember is that the accumulating class's price return already equals a total-return, so comparing it against a price-only index will overstate performance. See distributing-share-class.
Related: share-class, total-return, ucits, cost-basis-method, tax-advantaged-account