For contemporary dance, because it’s an important skill for a lot of partnering moves, like jumps involving two persons (an example of partnering: https://www.youtube.com/watch?v=T1BbxTWsoO4&t=13s). One important detail I found interesting is that for contemporary dancers, it’s not only about the arms, but how to use the whole body for the hug. Many people in everyday life unconsciously lean forward while hugging to keep some distance between their hips. Close hips feel much to intimate in Western culture for most people. We trained to not do that. Instead we trained to stand with slightly offset feet, so we could stand very close to each other and stay upright and to hug with the whole body. This is both aesthetically and especially biomechanically advantageous for dance.
Similarly in couple dances like Tango the quality of the hug is very important. I remember many female Tango friends would praise an experienced dancer for his abrazo before anything else.