Before Denuvo 5, pirates would buy a game, activate it on an offline VM, clone the license token, and sell the "offline activation" on eBay for $2. With a 5-machine limit, a reseller can only sell to 5 customers before the key is worthless. This dramatically reduced the gray market for shared accounts.
The Invisible Barrier: Analysing the Denuvo 5 Machine Activation Limit denuvo 5 machine activation limit