The system account is running in the highest privilege level on Window.
To run under system account is suitable for most installation procedures, updates, patches, copy actions, background tasks or administrator jobs.
There is no UAC dialog and it can see internal system folders.
In a domain, the account is known as local computer name, important to know if you want to give them permissions on a share.
The downside of system user is an incomplete account, because it’s missing user settings in an own profile path and HKEY_USERS registry key.