It minimizes twist this way. Twist happens the more the string wraps around the the tuning peg... by prewrapping the tuning peg and inserting into bring at latest possible moment twist is reduced
To add to this the more wraps the less intonation and tuning accuracy a person will have. Think of it this way. When you introduce a spring or coil into any system you add flexibility. Decreasing the size of the coil reduces flexibility increasing accuracy.
Not so good on a 4x4 vehicle but quite logical on a bass guitar IMO. 1.5-2 wraps max is what I usually strive for.