why does absolute encoder (even multiturn) have the option of an additional incremental output
I have mainly used optical encoders, but this should apply to all encoder types. The main reason you want to use incremental outputs for velocity control is latency. Your very carefully designed control loop can become unstable quite easily when there is a very small delay. Even worse, you cannot model the delay as a finite linear system in an analog control loop. I once had a D.C. Motor that became unstable when a \$1\ \mathrm{\mu s}\$ delay was introduced. 

Latency is also important when you use controllers that are not based on PID control. In a dead beat controller, for example, the transfer function needs to be controlled quite accurately.

Also keep in mind that for encoders that have higher resolution you cannot get the exact position immediately. You can get the position in the past due to the latency. For a linear encoder with resolution \$100\ \mathrm{nm}\$ you get 10,000,000 ticks per meter.