Another issue not yet mentioned is that, especially when using a computer to edit music, one may want to perform a sequence of transposing operations that create weird key signatures, but only normalize key signatures after performing all the steps. If one transposes a piece of music up, and then transposes a portion of it down by the same amount, it will often be desirable that the downward transposition should precisely cancel the effect of the upward transposition. If key signatures are normalized between the two operations, however, the operations might not cancel.
For example, if a piece of music had section which switched a few times between B major (five sharps) and B minor (two sharps) and was transposed up a major third, that would yield key signatures of D# major (nine sharps) and D# minor (six sharps). If the D# major portion were normalized to Eb (three sharps) and then the section was transposed back down, the result would be a mixture of Cb major (seven flats) and B minor (two sharps), with a consequence that matching notes in the major and minor key would appear at different staff positions.
One would generally want to normalize key signatures before printing them out for purposes of performance, but being able to have unusual key signatures during the editing process can allow computers to maintain distinctions during editing (e.g. the difference between Cb major and B major).