The AR-1 is used to power special configurations of track such as below. Track configuration like below would cause a short circuit if connected without the use of an AR-1. Note that if you follow Rail ’A’ around you will notice that it connects to Rail ‘B’! That is just like putting a piece of metal across Rail ’A’ and Rail ‘B’ which would cause a short circuit and would cause a power supply to shut down. The solution to power special track configurations like below is to add insulation gaps and power the sections with an AR-1. The AR-1 can also be used to isolate small sections of track, limiting the impact of short circuits if derailments occur to just one area of your layout.
 
Additional information here: https://www.ringengineering.com/AR-1.htm