It’s a shortcut that comes in handy when you operate in deep file hierarchies and can’t be bothered to memorize the path.

That said there’s even easier ways to get there:

Just navigate, the sidebar will reflect what’s in your Finder sidebar so you can use that as a shelf if you’re going into one specific directory a lot for your work. It’s a dynamic environment, you don’t have to treat it like it’s static.

Or: hit Command-Shift-G. This will allow you to type the path with tab completion.

Dragging the folder in is for when you’re operating in the Finder and another application and rather than navigating you want to just drag the proxy in to go right there. It’s a shortcut, but depending on the task it’s not necessarily the most efficient way to do it.