Why do some guitarists wrap a scrunchie around the nut of their guitar?

Reliable reply? If it is on the nut or fretboard, its lack of string muting skills must be disguised. It is still to mask its lack of string muting skills after the nut, on the headstock, except that it is not immediately necessary.

As a rule of thumb, the more effective the higher the fretboard, the less effective it is.

This does not imply that their skills are phony but instead indicates that they play at the limit of their ability and it supports the elimination of a postural problem (muting strings is just that) in a bid to focus on the more important aspects of the technique.