Well, it seems I was inattentive previous years when the information was redistributed.
The company performs this annual sweep as a benefit to the employees. All shares classified as ESOP can have dividends paid in cash to the participant instead of being reinvested into ESOP shares. If the participant elects cash distributions of the dividends, they are subject to ordinary income tax (filed under 1099-R) but are not subject to the 10% early withdrawal penalty.
Since the election can be made even after termination of employment, the participant may see a tax benefit in taking cash during years of low income to reduce future taxable income.