If every employee is an administrator on their computer and can open every folder, one compromised account or one mistake can damage the whole company.
Least privilege means: everyday work happens under a standard account, administrator rights are for IT only, and file access is granted by group and real need. That way, if an incident happens, the damage stays limited.
Example
Malware lands on an office laptop, but without admin rights it can't take hold of the system and has no access to the accounting folders.