Why not? The lists nip has private and public options already. This just exposes the feature to be used.
Maybe someone wants to follow people but not advertise it. Say their family list for instance, or a team working on a project that is under wraps. Maybe you want to follow a bunch of porn accounts and not look like a gooner. There's lots of possible reasons.
Same for mutes. Amethyst & Jumble have private mute lists, a feature I appreciate.