Limits a post to a single category by changing the checkboxes into radio buttons. Simple.
The biggest reason that you might want to use this plugin is that your site is structured around the assumption that posts will exist in a single category. This makes it impossible for a person to accidentally break your site's layout of functionality by putting a post in multiple categories.
If you have many contributors and don't have the resources for a thorough editorial flow with checks and rechecks, the plugin is an easy quick way to make sure your standard is maintained without taking a lot of time correcting mistakes.
Plugin live-swaps check boxes for radio button before the pages are sent to users.
Not currently. If they ever make sense — if for example we were to add the option to use it one all hierarchical taxonomies — it may possibly get one.