Because it speeds up the downlding process for everybody. If one person has a file to share. Then others can downld the same file at the same time by downlding parts that have been downlded by each other. So that means you can downld from multiple sources more easily. On a larger scale it helps the entire gnutella network. Otherwise people would get busy hosts much of the time.

This is not the same as sharing the incomplete folder. That is different & should never be done.

I'm not sure about your issue. Go to the LW menu bar, Tools>Options>Sharing & make sure the quarantine folder (whatever you titled it as) is not listed. If it is, then remove it. In the LW Library window you can unshare files & folders by right-clicking them. So right-click the quarantine folder & choose stop sharing folder.

I presume then that your Shared folder is not your download folder & is a custom folder called Shared. I ask because the default name for your downld folder is called Shared unless you changed the title.