For example, I'm working on a simple website with a script and a css file. The script goes in one directory while the css file goes in another. As I tweak things, I find I'm having to double-click on the path for the remote server to select one directory then do the same for the other. It would be great to transfer one file then press a key (or click a button) and it switches to the previous directory so I could transfer the other file. Toggling again would switch back to the other dir.
That is I go to /path/subdirA and transfer a file. I then switch to /otherpath/subdirB. /path/subdirA is now the "previous" directory. If I then hit the toggle, winscp switches back to /path/subdirA and /otherpath/subdirB becomes the "previous" directory.
This isn't that useful if you climb up and down the directory tree to get from dir A to dir B, but if you go there directly (such as from the "open directory" dialog), it could be very useful.