I'm a little confused about when I'd use this, if I'm quickly iterating on code as I develop it, probably I also want to know whether it type checks, right?
No, during development your IDE will show you type errors and your dev server can ignore them. In CI tsc can type check. It's the best of all worlds: incorrect code will compile and work best-effort, you can see errors in your IDE, and CI will fail if it's incorrect.