This is a waterproofing system. When liquid water gets into such a gravel backfill, it quickly runs down into the drain tile and is diverted away through a pipe either by gravity or a sump pump. When a drain tile is used, but soil is used for backfill, the water can't drain away as quickly, so it tries to drain through the foundation wall. If enough liquid water is present, hydrostatic pressure will force it through any opening it can find in the foundation wall, no matter how small. The purpose of the stone or gravel backfill is to relieve the hydrostatic pressure.
Today there are various fiberglass or plastic drainage mats available that work just as well.
They are a half inch or so thick and are very porous. By placing them next to a foundation wall, when liquid water gets near the mat, it quickly runs down through the mat into the drain tile. When the soil is merely damp, as it often is, liquid water isn't the problem. When damp soil is next to a foundation, it will cause the foundation to get damp. The dampness will work its way through the foundation wall and eventually enter the basement or crawl space.