Skimming the cylinder head (and block) makes the combustion chamber smaller which increases compression. Higher compression (until a certain point) makes more power and the engine more efficient. There is a downside though, higher compression means higher combustion temperature which means higher NOx emissions. That is also the reason engine manufacturers keep lowering compression on their diesel engines, as they’re notoriously high NOx emitters.

As mentioned in the imgur comments: "Flattening the underside of an engine head after it has been deformed by the heat and possibly has blown the gasket." A quite positive reliability effect in that a flat surface is a better gasket mating surface - means much less likely to have a gasket and overheating problem