The advantage of transclusions is that you can use a piece of text multiple times, and in different combinations, without have to copy/paste it every time.
So, for example in my zettelkasten I have various short (atomic?) notes about “leadership”. I can combine those notes such that they form a “story”, an essay if you like.
I also have notes on “personality” combines into 1 story. I have also embedded/transcluded some of the personality notes into the leadership story.
You can make endless combinations, and if you’re into writing, this is a great way of constructing stories.
A transclusion feature that was added in Obsidian 0.8.15 was multilevel transclusion, down to 5 levels. So, if note 1 is transcluded in note 2, then you can transclude note 2 into note 3, and the transclusion of note 1 will also be visible in note 3. Pre-0.8.15 this was not possible beyond note 2.