I think it's only for buildings actually. Even in CQB though, since the game is an abstraction, I think it's reasonable to assume that cover generally had some utility.
It's probably meant to be a bit of a boost for SMG units, since it allows their full DPS to always (well, usually) affect enemies as a compensation for how they must get close to be effective.
Of course, Relic could instead remove the point blank mechanic and increase small arms' DPS at close-range instead, but the current way is probably preferable to that so SMG units don't, say, totally obliterate a mortar squad out of cover that they get next to.