you can but then you cannot have multiple uv maps (e.g. one huge skin for the shadows while other textures repeat and maintain their resolution)

So you can have a 128x128 pixel grass texture repeating, so it always looks 128x128. but then a single big image on top of that for shadows. This tool is mostly important for putting shadow maps on mdl entities without the huge memory hit that u get from baking your shadows directly onto huge textures