It’s for when you’re referring to more people than every single person that you’re referring to.
See: ATM machine, a machine that dispenses automated teller machines; PIN number, the number that must be used in order to use a personal identification number; NIC card, a network interface card that a NIC uses to access a network interface.
To be clear, we are picking apart common vernacular and lingo, but generally, “y’all” is a contraction of “you all”, making “all (of) you all” rather redundant, but most probably used for emphasis.