Business Objects in workflows help you maintain the context and use Siebel Operation Steps inside workflows. You will not be able to use Siebel Query, Insert, Update step if you don’t provide Business Object in Siebel Workflows.
When you execute a workflow through runtime event or a user property then the active Business Object context is passed to the workflow which allows workflow to work on any child business component records without actually need to query on the BC.
Below given link will provide an example of such behavior
P.S: Data Validation Manager (DVM) works similarly using Active BO context