It's purpose (as a wooden boat friend advised), is to keep the finished well sides(paint or varnish), away from the wet decking.

I more or less copied my existing cockpit sole details including this perimeter piece. It's 1" high by 1 1/4" wide and has a 1/2" radius cove taken out of it.

The piece is a nice visual detail to transition between very different materials so it's worth the extra time. I'll have the sole decked in a few more hours. The holes are for screws that will reattach the sole to the cockpit well in a final epoxy joint.