So let's say that it suddenly becomes too warm to keep on the sweater
you've been wearing, so you take it off, but you don't have anywhere to stow it or you're worried it may suddenly become cold again soon. So you've just kind of got this sweater that you're carrying around, that you have to keep track of, irritatingly ensuring you probably aren't going to have both hands free while walking.
Solution: tie the arms of the sweater around your waist into a kind of makeshift belt, leaving the body of the sweater just hanging off of you kiltlike, and stop having to worry about it. Unless you for some reason wind up running a lot and the knot starts to loosen, you can put that sweater OUT OF YOUR MIND!!
I like doing this. It's convenient, etc., and definitely preferable to your other options here, which would be slinging it over your shoulder clumsily until it falls off or, horiffically, tying a sweater around your neck so it just kind of hangs down your back, which is in my most humble opinion quite possibly the most pretentious single statement that humans are capable of expressing through clothing. I'm not sure why; just seems that way to me. Plus if you do any movement at all, the sweater falls backward and the knot lands against your throat, vaguely choking you in a fairly irritating way. So that's out.
For some reason, though, there is this bizarre social stigma in males attached to the whole sweater-kilt-tying meme. People don't much express this stigma outwardly or really even think about it, but still seem to avoid wearing a sweater this way because of some kind of mental link between the skirt-like appearance of the thing and some kind of deadly effeminacy. I think this is just kind of silly; i mean, come on, is it really worth having to deal with carrying the sweater all over the place? Is your personal sense of dignity as defined within a wholly arbitrary societally-imposed value system really more important than convenience? (And anyway, i'm of scottish descent, and i happen to think kilts are really cool. So shut up.)
If accosted by closed-minded individuals for your choice of unusable-sweater-disposal methods, you may be able to find some form of vindication by pointing out that in the movie Mallrats, the main character guy ties a sweater around his waist upon entering the mall for the first time and keeps it there for the rest of the movie (which ought to provide any necessary stamp of legitimacy as far as "coolness" goes), and then deflecting any further comments by acting as if anyone who doesn't like Kevin Smith movies is not worth talking to anyway.
deep thought says that where he comes from, they call sweaters that have been used this way "buttwraps".