Because the bond must erode to release blunt diamonds and expose fresh ones. Hard material blunts diamonds quickly, so the bond has to wear quickly to keep up - a hard bond holds blunt diamonds and the blade glazes and stops cutting. Selecting a blade by how tough it sounds gets this exactly backwards.

They let air or water reach the cutting zone, carry slurry and debris out, and allow each segment to cool. Without them the blade overheats, the core can distort and the segments can lose their braze. It is why concrete blades are segmented while tile blades are continuous.

Yes, if there is significant rebar. Cutting reinforced concrete alternates between abrasive aggregate and ductile steel, which are opposite requirements, and blades specified for it use a bond and diamond mix that handles both. A plain concrete blade cutting heavy rebar will wear rapidly or glaze.

Wet where possible - it extends blade life considerably, keeps the core cool and suppresses silica dust at source. Dry cutting is done where water cannot be used, and then on-tool extraction is required, since dry cutting concrete releases respirable crystalline silica well above exposure limits.

It has most likely glazed, meaning the diamonds are blunt and the bond has not worn back to expose fresh ones. Cutting into an abrasive material such as a sharpening block or soft sandstone dresses the bond back and restores it. Persistent glazing means the bond is too hard for the material.