What is the point of setting an upper limit in Auto-ISO?

Increasing ISO has no detrimental effect on image quality. However, the lower exposure (shutter speed and aperture) causes degradation (noise). If your shutter speed and aperture stay the same, the image will have the same noise at ISO 1600 as at ISO 6400.

I do not remember why I had this shutter speed. But the point is that at this setting camera requested this ISO since there was not enough light to hit a sensor. to produce image of this brightness at lower ISO.

Were you shooting for SOOC JPEG images?

No, I shoot 99.9% RAW.

Then the camera doesn't know what the brightness of the image will be.

Some people who are using cameras where analog or digital gain are used up to the highest ISOs would rather have a little more read noise but much more highlights in the ISO settings.

It can also remind you how weak your exposures are, when you see dark review images or dark "exposure simulation". Noise isn't always obvious on an LCD or in an EVF if you don't zoom in.

You can use this to switch to "mostly flash" above a certain ISO, by using flash fill, which will become a greater percentage of the total exposure as the ambient starts to drop, but the FEC is still trying to work off of the ISO setting.

Those are some possible reasons off the top of my head.

Some people using Av would rather have a risk of motion blur rather than noise beyond a certain level.

In this case what I see on the rear LCD? And then I see the same when I transfer images to the computer and open them in LrC?

Hear, hear.

To prevent the camera from producing extremely noisy images that not even the latest software options can handle. My simple D7500 produces more than OK images at ISO 32,000, while my Nikon 1 V1 is best when stopped at around ISO 3,200.

Sometimes the darker environments are ones where the lights are in the scene and there are no white walls around to diffuse light, and such environments need more headroom, especially if the lights are colored and would blow out to white. Imagine someone sitting outside a café at night, with neon lights in the background, and specular glare on the curves of their face. How do you get the SNR that you want in their face without blowing highlights?

True enough. But is that important, assuming you can see well enough to frame and focus?

Better then to see just a black blob or close to it. Would it be better if I take a dark image at lesser ISO and increase brightness in PP?

I often do that. It gives me more freedom to control the highlights, and no more visible read noise, if done right.

I think either fully manual control of ISO or applying EC manually in Auto ISO is a better choice to control highlight headroom than hoping that an arbitrary Auto-ISO upper limit will start protecting highlights when required.

Setting an ISO constraint will not stop the increase in noise.

Tell me more!

www.photonstophotos.net/Charts/RN_e.htm#Nikon%20D7500_14

The D7500 read noise vs ISO curve nearly monotonically decreases. There is never a point where turning up the ISO causes more noise if exposure is held constant.

Perhaps, but you asked why people do something, and I gave some reasons why they might do it, within the context of their habits and logic.