Some people use the block to simplify the wiring process, because of space issues, or to allow control panel swaping.
Basically, all the wires from your controls go into one side of the terminal block. Then a set of wires comes out of the other side of the block and go into the IPAC.
An example of how and why: My control panel is very small, there is no room for the ipac on the panel itself, and I wanted to be able to swap in different control panels. So, I wired all the controls into the terminal bloc, then connected a male DB-25 (RS-232) cable to the other side. The DB-25 plugs into a female DB-25 that is connected to the ipac (which I've mounted on the side of my cabinet). The upshot of all this is when I want to swap control panels I just unplug it and plug in a new one.