Hi Tjoenn,
Im sure there are others who have a more detailed understanding but I was always led to understand that a collar stand was exactly that, to help the leather collar stand upright. Where the collar joins the body there is a strip of extra leather and stitching that goes around the circumference of the collar, stiffening it in a sense from sagging. You can see the stitching in a thin band on the inside lining of the jacket around the collar in this 1402-P Werber. The stitching is also visible on the outside of the collar where it joins the body. From experience it helps to keep the collar more upright, but can also be stiff.
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