My assumption is that the buffer was a thoughtful addition to the memory pipeline to hedge against long loading times and excessive CD-ROM reads. As the game is loaded into main RAM, VRAM, and Audio RAM and the player is playing, the CD-Rom can "casually" seek the next level's data and pre-load 512KB of it into the buffer to give it a head start when needed.
Also figured it could be a reason why the some of the Saturn 2D fighters loaded faster between bouts than the Playstation versions. Ancillary things like the ending portraits or level transition screens (i.e. the world map and fighter quote screens) could sit in buffer RAM rather than waste precious main RAM for the actual gameplay. This would have been a luxury the Playstation didn't have.
Also figured it could be a reason why the some of the Saturn 2D fighters loaded faster between bouts than the Playstation versions. Ancillary things like the ending portraits or level transition screens (i.e. the world map and fighter quote screens) could sit in buffer RAM rather than waste precious main RAM for the actual gameplay. This would have been a luxury the Playstation didn't have.