What is the point of mega hydreigon's ability?

The game says that all damage done is divided evenly between the heads so is there some form of extra damage i am missing?

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Yes. Every hit gets an additional +5 increase to the move’s divided base power.
So in the case of Flash Cannon where Hydreigon has 8 heads:

BPtotal = (BPdivided + 5) * 8 = 120; where BPdivided = 80 / 8 = 10

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thanks for answering man.