The rationale is this.

NWA auto-processes upgrades 5 days out, 3 days out, and 1 day out, for everyone eligible. They will also check for upgrade seat availability when you check in, and then add you to a waiting list if First seats are not available. But, the waiting list doesn't get processed until gate-time.

It's possible that between when you check in and when the waiting list is processed that a first class seat opens up that you would be eligible for (someone cancels, changes flights, NWA stops holding them back, whatever). If you're already checked in, then you can't check in again, and will only get that seat if it's still available when NWA processes the whole wait list. But, if you are not checked in, and you check in once the seat is available, you could get the upgrade right then.

So, by canceling out your check-in once you realize you're not going to get upgraded right then but before you're checked in, you preserve your ability to try checking in again later when a seat might have opened up, but before the wait list is processed.

BUT... recent feedback suggests that NWA has changed this, and now processes the wait list anytime seats in First open up. So you SHOULD be able to just check in, then let the wait list do it's thing, and NWA will email you to let you know you need to check in again if you're upgraded before you get to the gate.