Custom URLs enhance the clarity, branding, and manageability of your Power Platform environment. By giving your environment a specific, meaningful name in the URL, you make it easier for users to recognize and navigate to the correct environment. This is especially useful in organizations where multiple environments (e.g., development, testing, production) are used, and each needs to be distinct yet easily identifiable.
Importantly, the custom URL prefixes the URLs of any model-driven apps hosted within that environment. This gives a more professional experience than using the default random URL prefix.