One example (as I recall) is allowing a tri colored mast head light for sailing smaller boats offshore, but only running lights for inland waters. Didn't make sense until I realized that in more restricted waters, skippers may not be far enough away to be looking 40 or 50 feet in the air for lights. In addition, the mast head light makes sense in big seas.
Tri-color lights are allowed for both offshore and inshore under 20 meters.
One advantage is that the lights distract the helmsmen less high up.
A side light can reflect off the head-sail at deck level causing glare.