Easy, it's the proper tool for the job. Just like you don't take a sledge hammer to install trim in your living room, you instead choose a small finishing hammer. When you want to go deep and hit hard, yeah, that's when the sledge hammer is called for.
We can choose several coil sizes to fit the task we wish to do. A large coil is for covering a larger area of ground with each sweep and hunt a little deeper at the same time. But a larger coil won't "see" smaller objects as well. Just like the sledge isn't the best tool to drive a finish nail.
But it also makes no sense to try to drive a large spike with that tiny brad hammer, so we switch from one to another as the hunt dictates.
A small coil has a tighter, more confined field of detecting energy beneath it. It will be less affected by nearby trash or "nuisance" iron, like a steel fence or the posts of a playground swing, or perhaps it's a bit of foil or a nail close to a coin. A larger coil may not be able to "get between" these nearby objects, but a smaller coil might accomplish that with ease. Some things like target ID may also improve, because sometimes multiple targets that appear under a larger coil at the same time can actually "merge" in their ID. The ID shown on your detector's screen is in this case completely wrong for either tagret, while a small coil might be able to pick them up individually with correct ID.
Put a nail and a coin on the groundnext to each other and do a few tests. You might learn a whole lot of things about how your detector actually works. Some units might merge these two signals into one "composite" signal that is neitgher iron nor coin, but a pulltag ID instead. Others might hit on both signals, but the dual response is confusing to the operator. A smaller coil will tend to shout out each target by itself, in turn, as you sweep each way. Any advantage you can gain by your experience or your equipment helps give you and "edge" over your fellow hunters and might disclose some finds that previous hunters missed, who did not possess your newly expanded knowledge. Go forth and seek it!
At any rate, with this narrowed field of detection, you can thus hunt closer to and around such objects, since the coil does not "see" them as much as a larger coil would. Depth is less as well, but just being able to get closer to unavoidable large metal objects or heavy junk deposits can really help.
Since the smaller coil's field is tight and narrow, it automatically helps with pinpointing. There is a major reason that all pinpointer coils are very small, besides fitting into a small and/or deep hole. Their field of detection is narrowed, so you can find which direction you should head to recover a small, dirty, buried or encrusted target that avoids detection by eye. Such targets are often found off to the side of the main hole you are excavating using just the larger "factory" coil.
But there's drawbacks to relying on only a small coil. To hunt an entire site with a small coil would be a very time-consuming job, and the maximum dpeth is limited. So it's good to have the extra options in your bag of tricks to use the particular tool best suited to the task at hand. For most any of the Bounty Hunter models we're discussing here, we have the 4", 7", 8" and 10" coils, plus I guess there is an even larger coil designed for one of the Fisher machines that will also work very well with a Bounty Hunter. Hopefully someone will chime in on that, as I don't remember the post that spoke of it.
Some dedicated detectorists might hunt a given site with each of the several coils they own. First with the small coil to find the surface stuff and junk, next a mid-size coil to find small items that may have been hidden by the surface finds. Then they step up in size as the surface junk and other targets are removed in order to seek the deeper stuff.
But that's only one method. That's half the fun, and trying new things and new tools on the "old same place" can sometimes yield surprising results!
-Ed