they put the band behind the nut to dmapened unwanted overtones and stuff like tihs. Same thing can be done to after the bridge with a piece of tape. it will clean up the sound, but will be useless on a floyded guitar.
Yeah like a scrunchy or whatever they call them... a wristband also works, but not as well. I just found out about this technique, its done to mute the strings by the top of the guitar so the strings wont feed back during high-gain / loud volume soloing.
I've seen bass players mostly do this. Suppose it prevents sustain. Guitar, probably if you wanna play atonal percussive funk stuff. Beck weaved a comb at the nut. But so that he'd get crappy buzzes and sitar fx.
I have a strat that used to have the strings ringing out above the nut before i recut the nut slots a bit.... i was going to use some sort of foam or stuff above the nut to stop the ringing.... it is picked up by the amp and causes overtones!