Use
The loop is typically attached to a climbing harness by carabiner.
It can also be used to isolate a worn section of rope, where the knot is tied such that the worn section is isolated in the loop (which of course does not receive a carabiner nor bear any loads in this case). The loop portion is isolated when the other two legs are loaded, and in fact the butterfly can be tied as a bend with the ends emerging where the loop would be.
Errors in tying the butterfly loop can produce a similar looking but inferior knot, the so-called "false butterfly", which is prone to slipping. However, some sources suggest this behavior can be exploited purposely for shock absorption. Wright and Magowan called this less secure loop knot the "half-hitch noose".
Read more about this topic: Butterfly Loop
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