So correct me if I'm wrong, but it seems to maintain a web socket 'mesh' that it proxies all inter-service communication through. So whenever you need to speak to another service, you don't need to worry about the extra cost of creation/teardown of a new web socket. It also says that it handles automatic retries, global rate limiting (https://lyft.github.io/envoy/docs/intro/what_is_envoy.html).
Because all inter-service requests are going through Envoy, it is really easy to keep incredibly detailed stats about network health, request success rate & more.
Envoy performing the task of load balancing does not defeat the purpose, because it provides extremely detailed stats for ALL THE THINGS, they reported it helped them find problems much quicker, instead of checking service code, EC2 networking, or the ELB. Essentially by creating a supersolution with better stats reporting for all, troubleshooting seems like it would be easier.