I personally don't see any aerodynamic advantage. If anything, it would get in the way. But I do think it's good for other reasons.
If you look at practitioners like Timothy Shieff and Ben Jenkins, you'll often see them wearing these pants, and to a large extent, they are some of the biggest trailblazers in parkour and freerunning. They are idolized by many, and it's not uncommon to take on the clothing style of someone you admire.
As for practicing in it, I suppose it does have some "freedom" to it, as flexibility of the fabric is suddenly a non-issue (and it tends to be a limiting factor). Also, for warmer areas and intense workouts, having baggy pants would help with staying cool.
But then, there's the topic of how you look, or rather, if you look different. Many moves and techniques can get a completely new aesthetic to it if you do it in different clothing. And since many like to shoot videos of themselves and others performing moves, it's not unlikely that the visual effect is desirable.
As for hiding flaws in one's technique, as you mention, I don't think that's important. One of the key elements of parkour and freerunning is that you're supposed to do it in your own way, and that looking different is charming.