The purpose of setting the privacy of an event is to give you the option whether or not you would like that event to be seen by only you, by the entire community, or just by a specific group of people.

You may have an event that pertains to you, but is not deemed important to the rest of the community. In this case, you would make the event private to you rather than making it public to everyone. If you wanted only your business or a group that you are a part to see the event, you would set the privacy to be seen by only your group or your business.

If you make an event private, you will still see the event on the community calendar, but those without permissions to view it will not be able to see it when they log in. This way you get information that is relevant to you, your group or your business.