Traditional Rotating Internships are a DO/AOA thing.
Prelim and Transitional years are a MD/ACGME thing.
Some people do them because they have to for certain specialties (both on AOA and ACGME side) such as for specialties like PMR, radiology, etc. Previously all DOs had to do Traditional Rotating Internships, but that's not the case anymore and most specialties you can match directly in to them.
Some people do them because they haven't figured out which specialty they want to go in, so they take that year to decide.
Some people do them because they didn't match anywhere else.
The AOA and ACGME have specific requirements of which rotations you have to complete during that year.