It avoids a full shuffle. If it's known that the number is decreasing then the executor can safely keep data on the minimum number of partitions, only moving the data off the extra nodes, onto the nodes that we kept.
So, it would go something like this:
Node 1 = 1,2,3
Node 2 = 4,5,6
Node 3 = 7,8,9
Node 4 = 10,11,12
Then coalesce down to 2 partitions:
Node 1 = 1,2,3 + (10,11,12)
Node 3 = 7,8,9 + (4,5,6)
Notice that Node 1 and Node 3 did not require its original data to move.