I usually hear this piece of leather referred to as a "gusset," and in addition to what has been referenced above, the presence of one will allow the wearer to unzip the sleeve and not have a gaping split for the length of the zipper flapping about.
If unzipped while riding, and wearing non-gauntlet styled gloves, the larger sleeve opening affords air a chance to run up the arms. This can have quite a cooling effect in warmer weather.
If unzipped while riding, and wearing non-gauntlet styled gloves, the larger sleeve opening affords air a chance to run up the arms. This can have quite a cooling effect in warmer weather.