Some examples where I think private follows would be useful:

My family & IRL friends and contacts. I could keep them in private lists. That way if someone wants to attack me for something I've said online they don't have immediate access to my friends and loved ones to harass.

Working on secret projects. If I was in a group working on something that I didn't want revealed yet, a private list could help keep the fact we are even working together out of the public eye.

Whistleblowers. I don't even think this needs explanation.

Please note I'm not saying it should be mandatory, or even default. Just an option. I think the positives would far outweigh any negatives.