Both are correct
The International Plumbing Code indicates the static pressure must be less than 80 psig, otherwise a pressure reducing valve or regulator is required. I think the Uniform Plumbing Code is similar. This is mainly to reduce wear and tear on plumbing fixtures.
For operation of the plumbing system, you would use the residual pressure to determine pressure loss at the design flow in the system piping to determine if adequate water pressure is available for fixture use.
Flush valves, for instance have a pressure requirement at a certain flow (25 gpm at 35 psig in the IPC). If the residual is not enough, you would need to design a boosted system.