This is similar to the CPUID attributes bit that Intel IA-64 processors use to allow programs to detect if they are running under IA-32 emulation.
For the time being, it is impractical to equip computers with sufficient memory to require a full 64 bits.
As long as that remains the case, load/store unit(s), cache tags, MMUs and TLBs can be simplified without any loss of usable memory.
Despite this limitation, software is programmed using full 64-bit pointers, and will therefore be able to use progressively larger address spaces as they become supported by future processors and operating systems.
The limit of physical addressing constrains how much installed RAM is able to be accessed by the computer.