But it can quickly stop the machine so you can correct whatever has caused it to lose steps rather continuing to machine the part incorrectly.
Otherwise, you might not know it lost any steps until the program is finished and went back to target.
Only then do you find out it has moved. Yeech! - more scrap?
Where and when it lost steps might still be a mystery until you closely examine the (scrapped?) part.
However, it could be a bit too late to save the part.
Losing steps can easily occur in subsequent parts due to the cutter getting dull, inadequate axis lube producing extra drag, or excess/unplanned stock removal due to sloppy saw cuts or casting irregularities, etc.
IMHO, encoders are an essential ingredient in most any stepper powered machine.
Encoders DO NOT correct any stepper position problem, but it can simply stop the machine so you can correct the actual problem causing it.
At least it can give you a chance to save the part when the problem occurs.