That's actually very important and why it exists: It ensures a way to settle debts. "Oh don't be ridiculous" has very little weight in money and debts disputes.

In the case you mention this is called "defence of tender before claim". It means the person offered to the money but that was refused, so they go and pay it into court to protect themselves. In effect it means that if someone offers to settle in legal tender and is refused, then follow that legal procedure, then the creditor cannot do anything anymore expect recovering the money from the court.