Originally posted by demp10 I believe it is for video cameras so they can be aligned properly.
You got it right. If you don't have a video camera exactly square on the mount, you get compound moves when you tilt, with the horizon shifting off level. Most dedicated video cameras have a non-screw pin hole in front of the 1/4-20 mount to align the camera. Most tripod mounts now include this alignment pin - sometimes it is sprung as described by the OP, and sometimes it screws in. The screw-in type of pin tends to get lost within minutes of unscrewing them.