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During the post-unbonding stake holding period the validator is not active, but their stake is still held by the PoS contract and they can still be slashed by other validators. The purpose of this holding time is to prevent a variant of the "long range attack" in which a validator "re-writes history" on a separate chain from the main one. If, after a validator unbonds, they get their stake back immediately then they can start producing a different chain off a recent past block where they had stake without fear of being slashed for equivocation because their stake has already been recovered in the main chain. By holding the stake for a period after the validator is no longer active they can still be slashed for attempting a long range attack during that time. If the time is long enough that the network has moved sufficiently far ahead since the validator unbonded then "weak subjectivity" should be enough to combat a long range attack attempted after the holding period.
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