It works like this: say you have a project parameter called ServerName:
Lets say you deploy an SSIS package into two integration catalog environments, one which is configured for prod server and another which is configured for test server:
Then your ServerName 'parameter' will be set in prod with prod server address and in test environment to contain test server address. If any variable in your ssis package needs a runtime value(say the variable is used to set a connection at run time for prod or test servers respectively) then the variable will use the parameter from above to find the right server to connect to.
So parameters are usually needed in environment specific scenarios.
There are two types of parameters based on how you've configured your solution in Visual Studio: Project parameters or Package parameters. Project parameters are accessible to all packages in the project.