Hi Kashish,
The feature was introduced to provide more flexibility to your nat configurations. I would suggest you go through this exlanation for your question in the release notes:
In 8.4(2) and later, the default behavior for identity NAT was changed to match the behavior of other static NAT configurations: proxy ARP is enabled, and the NAT configuration determines the egress interface (if specified) by default. You can leave these settings as is, or you can enable or disable them discretely
http://www.cisco.com/en/US/docs/security/asa/asa84/release/notes/asarn84.html#wp535067
Let me know if you need any other explanation.
Thanks,
Varun Rao
Security Team,
Cisco TAC
Thanks,
Varun Rao