It's an isolation transformer. It isolates the output circuit from the input.
Because the output voltage is not referenced to Earth or Chassis Ground theoretically this means that you cant get an electric shock by grounding one of the outputs, which is how you would usually get a shock. The only way you would get a shock is by shorting both output terminals of the secondary coil.
Also as stated above there is the current limiting effect. Being shocked by a secondary coil that can only provide 500mA is better than being shocked by a mains circuit that can provide 5A.