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I'm not an expert, but, I believe the layers cause the knife (or should) to have a subtle saw-like quality which aids (theoretically) in cutting for the entire width of the blade.
As I understand it (could well be wrong), the layers are not perfectly flush with each other and as you cut/slice, the ridges cause a saw like effect with each one being a small edge. Maybe just with pattern welding, but I have felt it by running my finger up the side of some "Damascus" blades.
The only Damascus blade I have experience with is on my Skyline (Alabama Damascus). For my EDC uses, it worked well (at least as well as the standard 14C28N). The etching pattern did fade somewhat with use (same as on my composite-blade knives), but a short dunk in some vinegar (followed by a thorough freshwater rinse) restored the contrast.