This is no different then selecting to put power factor correction capacitors near the motor vs having a common correction point for an entire plant.
If you put correction near each motor you will have less overall line loss (presuming you optimally corrected the power factor).
For situation like pictured in OP - POCO has to select which location best suits their needs. Putting a capacitor near every customer isn't going to be the most practical, especially in residential areas where the inductive loading will change frequently anyway. Instead they may find a reasonably consistent power factor is present over a certain area and strategically place that capacitor to get a reasonable correction for that area. Doesn't do much for line loss between the capacitor and the load in the area, but does improve line loss from the capacitor to the source, which also will improve voltage drop between the capacitor and the source because the reactive current is reduced in this same segment of the circuit. As I mentioned earlier in this thread - they may switch that capacitor out of the circuit if load conditions change, like if there is less reactive power present when air conditioning season comes to an end.