Great question! Some of it has to do with CO2 levels in the lungs. Lungs that have been injured by COPD, cancer, or other disease don't always exchange oxygen efficiently. They tend to trap CO2 so the lungs aren't able to oxygenate the blood fully. Every bodily function is negatively affected.

While I don't fully understand the whys of the times assigned some can clear the CO2 within a reasonable amount of time and don't require supplemental oxygen constantly. Doctors want the PO2 level to be above 92.

There are other factors that influence supplemental O2. Among them heart disease. An impaired heart cannot pump blood efficiently and supplemental O2 keeps the levels high enough that the heart doesn't have to strain too hard to do its job. The people in my family who are on 24 hour O2 have heart issues.

There's more to this and someone who knows more should be checking in soon.