Can it be used to send (withdraw) BTC to another wallet? If so, why wouldn't anyone just use that instead of btc network since it's so much cheaper? What am I missing?
You are missing the centralization and the risks that come with that.
When you own bitcoin and send bitcoin (that is anything on bitcoin blockchain) you remain in full control of your coins. At the end of the day 1
BTC=1
BTC no matter what.
But when you use a centralized shitcoin such as the wrapped coins on Binance chain, you are using a centralized token that may or may not even exist tomorrow or even be worth what it is supposed to be worth. For example 1 BTC token on Binance chain may be worth 0.00000001
BTC tomorrow or worse Binance exchange could shut down and the network could go away erasing all the tokens in there.
The other problem is that people who accept bitcoin payments (like a shop for example) don't recognize shitcoins, you can't go to a shop and pay with BinanceBtc.