Windows Autopilot device preparation is not a set of policies, it is a whole new profile type that changes the nature of Autopilot. It is separate and distinct from the original Windows Autopilot profiles (user driven, pre-provisioning, and self-provisioning). It is not a full replacement for the original Windows Autopilot profiles (today at least) but can be useful for certain scenarios including GCCH/US Government and assigning Autopilot to users instead of devices without pre-registering the devices. Windows Autopilot device preparation is a work in progress though and we plan on adding a lot of new capabilities to it in the near future. Check out Skilling snack: Windows Autopilot device preparation | Windows IT Pro Blog for a lot more info.

Note that today, you cannot use a custom name for devices with Windows Autopilot device preparation but this is something we've investigated adding.

You should be able to apply a template: https://learn.microsoft.com/en-us/autopilot/profiles 
(requires Microsoft Entra join type): Select Yes to create a template to use when naming a device during enrollment. Names must be 15 characters or less, and can have letters, numbers, and hyphens. Names can't be all numbers. Use the %SERIAL% macro to add a hardware-specific serial number. Or, use the %RAND:x% macro to add a random string of numbers, where x equals the number of digits to add. Only a prefix can be provided for hybrid devices in a domain join profile.

The advantage is essentially saving time and automating deployment processes.