When you create an estimate, it makes a copy of the Master Pricebook and places the copy within the estimate. This means that you can then make changes to the pricebook within the estimate without affecting any other estimates, or your Master Pricebook.
Sometimes you may make changes to the pricebook within the estimate, and wish to keep those changes for future use. To do this you can synchronise the pricebook in the estimate to your Master Pricebook.
The other common reason to synchronise pricebooks is to update the pricebook within an estimate with the latest version of the Master Pricebook; you may have made changes in this or had new terms downloaded.