The point of the function is that it doesn't matter you've crossed the year boundary when counting days.

A naive implementation would accidentally get tripped up by the year -- extracting the 'day' part of a timestamp, as an integer, gives you the day from the start of the year. So on one side of the year boundary you have 365 and on the other you have 1. The way to do it correctly is to multiply the day in the year by the year itself so that a '1' on a later year is a bigger number.

And of course grouping by year isn't always what you want to do :)