Boxing in real life is not like boxing in movies. No fighter can go 12 rounds just throwing hands all the time. The clinch is used often for strategic purposes, to stop the momentum or interrupt the rhythm of the other fighter. It also is used to get some kind of rest when one is getting pummelled and can’t find a way out.

Sometimes it’s abused of course. But it is very much a part of the sport.

It’s wholesome and gives the sport a balance. Only psychopaths would watch people beat each other without occasionally embracing in a warm loving hug.

In Muay Thai, when your opponent tries to throw a knee, they hold the back of your neck and pull you.
A knee to the stomach or plexus is really powerful, so you have to act fast.
The best defense in those cases is to hold the back of their neck in return, pull them closer so that they cannot strike, and try to throw a knee first.
It ends up with a play of the two opponents holding each other and trying to throw a knee while closing the distance.
And most likely ends up in the dead lock or “hugging” that we see in match.

I’m sure there are other techniques that involve this holding in MMA. Forbidding it would remove those techniques from the game.