It is preferable for players to mark their balls on the green to avoid their ball being hit, but it is not always ideal to wait for that to be done. The ball may belong to the last player to physically get to the green and the putting player sees no likelihood of hitting that ball. In some circumstances though a putt may hit the flagstick in the hole or career around the rim and then hit another ball on the green that had not yet been marked. On a mountainous green a putt may circle the hole and head back (anywhere) and strike another ball.
This Local Rule avoids the General Penalty (2 Strokes) for the player putting. They replay their shot and the struck ball is replaced where it was. A marker could be placed before the putt as an option.
When a ball is being addressed (and a putt occurs), or it is being marked, it is at rest and therefore there is no penalty for playing or marking a 'ball in motion'!
Historically it is believed that ‘croquet-style’ incidents gave rise to the general penalty when your putt hit another ball ‘at rest’ when the putt was made because the struck ball was not allowed to be placed in its original spot.
However, when the rule was introduced to cause the moved ball to be replaced, the penalty was not removed for some reason and remains on the books. It only applies however in Stroke Play!
We cannot ignore the penalty rule, but we can deem the ball never to be ‘at rest’ (what in the universe is ever ‘at rest’ anyway?).