In referrals, when your existing customers refer their friends, they and their friends can earn rewards. And these rewards had to be stored in that contact account as they can be redeemed at a later point.
Say, a customer has unsubscribed from his emails. Let's say, you have deleted his/her contact. Then all his data gets deleted. But, when the same customer abandons a cart next time, he will receive the emails (because his previous data was deleted permanently). This will annoy the customer and also a GDPR violation.