What are the purpose of the bare git repositories in .repo/projects/ created by the Android repo script?

The Android source is managed by repo. When syncing using repo, a directory called .repo/projects/ is created, which contains all the git repositories also checked out directly in the current working directory, just in bare git format.

For what purpose does repo maintain the bare git repositories? And how are these bare repositories used by repo?

(NB: Clarification: I am not talking about a git repository when I write "repo", I am talking specifically about the script called repo created by/for Android for maintaining all the git repositories comprising the Android source.)