Good question. Experimenting with the examples in the official SVG Spec (which have PNG renders included, so we can check the "expected" output), it seems there's two problems that this solves:

1. SVG Spec *requires* that we calculate the bounds for the text based on SVG rules. We have to do that using the transform --- I was surprised at this, it makes implementation much harder than I'd like, but SVG spec's approach to text is ... weird
2. Apple *requires* that you define the text-size BEFORE you render the layer, because Apple's clipping is applied early in the rendering --- I was suprised by this, seems that Apple did some bad API design, and made it so that CATextLayer doesn't have an "automatic" bounds based on the text contents. This is annoying :(.

...put those two together, and the font-size has to be downscaled BEFORE we scale the resulting layer. Yes, its weird - but turn it off, and then try some of the spec examples, and you'll see Apple apply "incorrect" clipping.