The Housing Act 1988 makes provisions for landlords to issue tenants notice - either before or during their tenancies - to declare that the tenancy is not to be an assured shorthold but rather merely an assured tenancy. What would they accomplish by achieving that?
The principal difference between as assured tenancy and an assured shorthold tenancy concerns section 21 ("no fault") evictions. ASTs have them; ATs don't.
For an AT, an eviction can only occur if one or more of the grounds listed in schedule 2 is met - most commonly, non-payment of rent.
There are other minor differences. For example, section 22 allows a tenant to apply to a tribunal if they feel that the rent is too high. This only applies to ASTs. Also for ASTs, there are a number of requirements that the landlord must adhere to before he can issue a section 21 notice, including giving the tenant gas and electricity safety certificates, protecting any deposit in an official deposit scheme, etc.
As the question states, the landlord can opt to make the tenancy an AT either before or during the tenancy (schedule 2A, sections 1 and 2, respectively).
As to why a landlord might do this: I've been unable to find any concrete examples. If we want to speculate: perhaps the landlord has let to a friend, and wants to ensure that the friend can continue to rent the property for as long as they want, even if the landlord sells the property with the tenant still present, or if the landlord dies and the property is inherited by someone else.
Using an AT would protect the tenant from a section 21 eviction from a future landlord...though a property with a sitting tenant - let alone one who can't easily be removed - would make it very hard to sell.