>>282296671 (OP)
>>282306716
I believe the purpose is that you could easily pull up the hem to reveal more. It's similar concept to anything that hangs (skirts, swimsuits with hanging frills), where it appears to cover up a lot of the body but can be easily pulled out of the way. You can think it as women's clothes having "vulnerabilities", the more vulnerabilities (gaps, holes, cuts, unsecured fabric etc) the sexier.
The fabric below the cut height on dolphin shorts is essentially just freely hanging flaps, making the shorts effectively smaller than it looks at first glance, which is a nice surprise. The difference might seem small, but the exposure of the sides of the hips is very imporant, don't underestimate it (same reason why the old Japanese gym pants are sexy). If you drew a line from the top of the cut to the crotch, the shorts start looking closer to panties/Japanese gym pants.
The opposite of this would be having thick edge secured with elastic band that sits low on the thigh. The dolphin shorts create a nice contrast where the edge looks kind of reinforced, but then the reinforcement is invalidated by the cut.
