What are the virtues of this approach? Besides a practical basis to structure free-form adventures, it also inculcates GM’s and players with specific attitudes. The GM learns to approach every situation assuming the players can do anything, and that letting them do so is right.
The players learn they can try anything (within the limits of the game’s mechanics and the setting itself). They have a tremendous sense of freedom. The consequences of missing a clue, or allowing an event to happen, make the game world seem more real, more like a place where cause-and-effect take place. Their choices have real consequences.
Writers and module designers are encouraged to think in terms of specific, evocative details. The clothes a band of thugs are wearing, the weapons they use, the language they speak: all of these are potential clues, and knowing an incident needs clues leads the writer towards putting specific and meaningful details in the description of the incident.
The real world has layers upon layers of meaning. My personal writing style tends towards short paragraphs. That tells experienced editors that I developed my writing skills while writing for newspapers. My writing style is evidence of my past.
Similarly, the clues a writer embeds in an incident arise from the nature of that incident, the participants, and the world itself. Because they reflect the facts of the world and the scenario, they are reliable leads to follow to discover the truth. They make the game world come alive and make it seem real.