I would imagine it locks the bridge in place in case you have problems with your strings going out of tune when you use the vibrato. Of course, it would also stop you being able to actually use the vibrato.
i dont get it, why are fastloader floyd's considered shitty? how would strings go out of tune easier?
The lock on Jaguar and Jazzmaster trems limits the bridge's upwards movement. The idea is that if a string breaks, normally the bridge would pull back since the spring tension is now greater than the combined string tension and this makes the other strings tune sharp. With the lock on the bridge can't move up/backwards so the strings cna't be pulled sharp even if one of them breaks. It does mean with the lock on you can't lift the bar up but you can still dip it down and since the Jag/Jazz style trem isn't really designed to do crazy whammy stuff anyway, you might as well keep the lock on.