This effects gameplay in three different ways:
1. when PC avatars 'bump/clip' they can get trapped during combat by allied creatures/other PCs, taking away control of movement. This happened to me twice in two days and was incredibly frustrating; the other players didn't realize what was happening (somewhat understandable) and my PC was getting pounded standing in place trying to move away from hostiles while trapped by friendlies.
Both from a PnP rules perspective (where you can freely move through squares that an ally occupies as long as you don't end movement in that square) and from a reasonable IC RP perspective (Hey, my buddy that's between me and the nasty is getting beat on and looks like he's pulling back; I'll make sure I don't get in his way/Hey buddy I'm getting beat on here and need to withdraw, let me get by thx vs *desperately runs into his buddy's chest again and again and bounces off while the buddy blindly ignores his plight or even steps on his foot*) this doesn't seem ideal unless the PCs are literally supposed to be packed like sardines into a truly tiny space.
2. Travel map, at least TSM's travel map. One of the less delightful (though somewhat humorous) experiences in ALFA is transitioning to one of TSM's travel maps and seeing the party leader (who is the only one that can move) get trapped by the other PCs around him. An option to toggle clipping on/off would simply eliminate this problem.
Less often, this also applies anytime a group of PC's get clustered together and need to move carefully; as is, it's like watching a bunch of bowling pins sometimes, one move a certain way, and everyone gets knocked around, possibly triggering traps, etc that they're trying to avoid.
3. Aesthetics. It just looks silly when folks are knocking each other about just by passing near them/moving close to them. It also prevents certain kinds of more touchy feely RP. I'm surprised none of the members of the cyberaholics anonymous have complained about this yet.
