This functionality serves the benefit of categorizing your lists as statuses that can be visualized on the milestone screen with a start and end date. When tasks within that list are completed, your milestones will visually update their progress in real-time.
This is the same functionality as clicking the "Create a Status for this Milestone" tickbox when creating a Milestone.
In this example, we have three separate marketing campaigns broken into Statuses that have tasks for the different marketing channels.
A Status can be converted into a milestone by hovering over the list's option menu and selecting "set task list as milestone."
Tasks in this Status are automatically tied to a new "Campaign 1" milestone and will remain tied to this milestone unless they are manually tied to a new milestone or are moved into a different milestone task list.
Similarly, tasks added into this Status will now be automatically tied to the Campaign 1 milestone.
Note: Deleting the milestone created from this list will revert this list to a normal Status and will untie the tasks in the list.