Grating butter into your doughs doesn’t just save time - it really is the smarter way to bake. This technique works with recipes that call for cutting butter into flour, which mainly happens in biscuit, pie, and various “flakey pastry” recipes.
So, to make pastry flakey, steam from small chunks of butter needs to rise during the baking process to push and separate the layers of dough created by flour. If during mixing, the butter somehow gets overheated, either by the warmth of your hands or by over-mixing, it incorporates too much into the flour, essentially making a dense dough. You need small pieces of cold butter, separate from the flour, to get flakiness. So really, the less contact you make with butter, the better.
And if you freeze your butter prior to grating it, you will ensure it stays cold and separated from the flour. It is also much easier to grate butter when it is cold, not to mention a ton less messy than having to use your hands and fingers to work the butter into the flour.