Because Route Developers are Morons.
This exists because the route developers are too stupid to realize the difference between a VIRTUAL item and a DOWNLOADABLE item. This is me doing their work for them because they're too incompetent to code correctly.
Their stock plugin started EXCLUDING products with the Downloadable attribute set. I sell products that need PDF files and ZIP files to use them (software downloads to go with a product). So when they did this all these items were then excluded from insurance.
Per the official woocommerce documentation a VIRTUAL item is one that will never ship but can also be downloadable. But normal products that do ship can also be downloadable (as in getting your customer firmware, software, manuals, or other files). Their developers are too stupid to learn the difference so like many things in life I have to fix their own shitty code myself, which is why this exists.