When knitting on DPs there are two reasons to divide the stitches on the needles. The main reason is that there are to many stitches to fit on to only two needles. By spreading the stitches onto three or four needles allows you to knit in a circle and makes the stitches easier to work with.
The second reason is to separate the instep (top of the sock) from the sole (bottom of the sock). This makes it easier if there is a pattern on the instep.
When converting to Magic Loop it is still important to know which are the instep stitches and which are the sole stitches. This can be done by either placing markers between the instep and sole or by how the loops of the magic loop are pulled out between the stitches.