It is just to preserve the avatar base beneath.
Kinda like tracing. You just draw the shirt and jacket in different paper, so when you want to edit either of it, it won't mess up the base or other portions.

So now, without layers, you already cover the base with your sleeve, how do you know where the exact pixels are?
Get a new base, cut the arm part and paste it over. x.x *sounds so bloody*