I'm not sure passing everything by reference probably would gain much in a systems programming language in the vein of Rust: one would still need some syntactic method to distinguish between shared ("immutable") and non-shared ("mutable") references. Also, Rust-style static reasoning cares about things actually being pointers, to allow returning references safely. Lastly, being able to move things around is important too, it is a major part in Rust creating zero-overhead abstractions.
I'm not sure exactly how MLKit works, but I glanced over https://github.com/melsman/mlkit/blob/master/doc/mlkit.pdf and it seems to me that its regions are somewhat less static and that it doesn't attempt to handle concurrency. I could be wrong on both counts!
As to why, well because the function asks for it, either because it generically works on values, or because it consumes the string to avoid copying its internal buffer (e.g. https://doc.rust-lang.org/std/string/struct.String.html#meth...), or whatever other reason. Either way that's a completely valid use.