1. Greatly reduces memory usage. Instead of memorizing every inflection of the word "walk", it memorizes the root (walk) and the modifiers (ing, ed, er, ...). These modifiers can be reused for other words.
2. Allows for word compositions that weren't in the training set. This is great for uncommon or new expressions like "googlification" or "unalive".
If you put:
test walk walker walking walked
[test][ walk][ walk][er][ walking][ walked]
I added "test" to that because walk at the start doesn't include the leading space and [walk] and [ walk] are different tokens.
For even more fun, [walker] is a distinct token if it doesn't include the leading space.
test walker floorwalker foowalker
[test][ walk][er][ floor][walker][ fo][ow][alker]
(Late edit)
walker floorwalker
[walker][ floor][walker]