Main benefit of a megathread is it helps prevent engagement from being splintered. So instead of having a dozen separate threads about an issue, with each one only having a few people participating, the issue could have one single megathread where everyone can go and all the interaction can get concentrated in a single location. This improves the experience for everyone discussing the topic, and also improves the experience of everyone who is uninterested in the topic since they won't be seeing large numbers of threads about it.

I think topics that are fairly specific, with a short chronological window and would include a lot of people wanting to talk about them make good megathreads. Major sporting events, major singular political events, big product releases, revolutionary scientific breakthroughs, long-awaited press releases or disclosures, major court cases, big concerts/public gatherings, etc.

There is a line where you don't want things to be too big, though, otherwise they become a slog to wade through. In these cases it can be broken into several megathreads, or you can even just make a community for the topic. Like, the Olympics would be a good example of too big for a single megathread.