Yes well if you are distributing to N machines, you probably want to use all M cores on each of those machines. You'll still get a performance advantage from multi-threading.

You might think that you can simply spin M processes per machine instead but now you have N*M servers instead of N servers that are M times faster. In many cases this means you have significantly higher overheads: slower startups, a lot more RAM usage, more network IO etc.

Outside of a few embarrassingly parallel problem, two-level parallelism is usually the highest performance approach.