The main function of the fluid is to cool the voice coil of the driver by transferring heat to nearby structures. The fluid can also act to damp the motion of the coil/diaphtagm.
The main downside is that the fluid will dry out in about 15 to 20 years. With some drivers, the gummy remsins of the gluid can be cleaned out and replaced eith hew fluid. I have not done this so I don’t know what that entails, but you can look it up by googling speaker ferrofluid.