ATC can ask crew to select 7700 as it will show up through any suppressing filters on any radar screens, enabling all ATC other staff to see any 7700 squawk in any neighbouring airspace. This is helpful because it tells the controller not to try and contact them unless absolutely necessary.
Additionally, crews can sometimes select 7700 inadvertently on the way to selecting their intended squawk, however this is often not possible on the avionics most modern airliners have installed. It’s far more common on light general aviation aircraft, indeed I’d say around London it’s a daily occurrence. When I see 7700 come up on my screen for an aircraft not under my control, I wait at least 5 seconds before reporting it.