GIMP Version: 2.8.14
Operating System: Linux
GIMP Experience: Basic Level

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Regarding Layer Boundary Size, when would you use it?

Making the boundary smaller (right-click a layer > Layer Boundary Size), seems like cropping but retaining the original image size.

But making the boundary larger, how is that used?

1. Resizing or moving a layer does not crop it, but rather scales it's bounding box/layer boundary. Sometimes part of the layer will be hidden (not cropped) if its boundary exceeds the image boundary.

2. By using the Scale tool or setting Layer Size you can enlarge or decrease the size of a layer (layer boundary)

NOTE: In this context, you only need to understand the difference between a layer and an image

Some actions (for example, bump mapping) require that two layers be the same size. So sometimes it will be necessary to increase the size of a layer.