Due to overloaded system, there are various damages to the motor, causing the magnet to demagnetize. Thus the demagnetized motor might run, but it won't be able to deliver the full torque and thereby causing the system to fail when they are exposed to full load.
Another scenario in which damage is incurred is by opening the stepper or pancake motor. There is a specific air gap between the magnets in the stator and the rotor itself; if this air gap is lost (ie. by the removal of the rotor) diamagnetism will occur.
By magnetizing the rotor after assembly, a high flux density is obtained that can be largely destroyed if the rotor is removed.
Thus by re-magnetizing your servo motor, stepper motor or pancake motor you will be assured that your motor will have the same torque output as it did when shipped from the manufacturer.