"Refundable fares" means that if you change your mind about your flight or have to cancel it, you can get your money back instead of losing it. Full definition
The only added perk of achieving VIP status is that you'll get 200 percent of the miles flown for refundable fares. (rewardexpert.com)
I agree with you stating it wasn't all that usable as the full refundable fare cost would be generally higher than buying two non refundable business class tickets. (pointswithacrew.com)
Refunds / Reissues: Except for tickets refunded under Delta's Risk Free Cancellation policy, miles redeemed with Pay with Miles can not be re-deposited in the member's SkyMiles Account — even for fully refundable fares. (delta.com)