See those holes in the rafter up there, that will let a little air flow into the overhang area between the first and second rafter. Without those holes the area between the first and second rafter would be completely sealed creating closed air pockets that would promote fungus growth on the outside of the gable end fascia and soffit.
Closing in the gable overhang making a box restricts air flow into the gable end fascia and soffit which in turn can make relatively large temperature gradients across the surfaces of the gable overhang. So in the morning when the outside air is warming dew can form on the gable fascia and soffit and help grow fungus. Those little holes let some air flow into the soffit box keeping the temperature closer to the outside temperature and where-by decrease the amount of water that condenses (dew) on the gable end fascia and soffit.