Wet sanding paint is fairly straight forward. First, you have to sand the texture out of it from being sprayed. Then all of the following steps are just to get the sand scratches fine enough to be able to polish out. Guide coat is almost a necessity in those following steps.
The purpose for guide coat? Whether it’s blocking primer, or wet sanding clear coat, the purpose of guide coat is to show you where scratches are. This means the guide coat needs to get put in every scratch for all of them to show up. Dry guide coat used very liberally works great. The whole point is to not miss a scratch.
You can see in the picture below, that it shows areas that are just barely missed. It also helps make sure that areas like next to the hood scoop are thoroughly sanded. Yes, it’s exaggerated a little bit for the picture, but it is very easy to just miss something
Using dry guide coat after 600/800, 1000 & 1500 grits helps ensure everything is sanded, and there are no surprises when you start buffing. I realize it is very possible to wet sand and buff without guide coat. It is just a very easy method that makes quality and efficiency go up quite a bit.
Do not use guide coat after 2,000 grit. Anything finer has a hard time taking it off.