Does the school in question use “level of applicant’s interest” in admissions? (See its common data set, section C7, or the admissions tab on its entry on http://www.collegedata.com .)
If so, then that school is trying to find out if the applicant is using it as a “safety” (i.e. if the list of other colleges is made of those more selective than the school in question), so that it can reject or waitlist the applicant based on the assumption that the applicant will be admitted elsewhere and attend elsewhere.
On the other hand, if the list only includes other schools generally seen as “less desirable”, the school in question may decide that the applicant is not worth offering merit scholarships (or preferentially packaged financial aid) to, since s/he will attend anyway.