JY talks about it here:
http://classic.7sage.com/lesson/keep-time/
The idea is that you don't have to worry about fumbling with your watch and resetting it. You just push go when the proctor says start. Also resetting it each section makes it difficult to get the second hand in sync with your time because you only have seconds to reset your watch. Having three watches preset makes it so your time is to a tee.
I bought three watches after reading JY's post about keeping time. However, I just read the comments below where someone said they e-mailed LSAC about it and were told it is not allowed. I've heard a couple people's experiences and both were positive. Just wondering if anyone has encountered any problems when trying to use three watches?
Out of curiosity, I called LSAC just now to ask. The lady started off by saying "I don't see a reason why you wouldn't be able to" but says she'll go check to be sure. After a few extra minutes on hold she comes back and tells me that I'm only allowed to have one analog watch. It seems like it's something LSAC can't just come to one consensus on.