In brief- the goal of System Types was to provide a mechanism by which to pre-define systems and their associated characteristics, and to allow display control to be assigned to logical 'groups' of things. for example, you can now define Types for the following
1. Chilled Water Return
2. Chilled Water Supply
3. Heating Hot Water Supply
4. Heating Hot Water Return
5. Sanitary Black Water
6. Sanitary Grey Water
7. Circulating Hot Water
For each system type, you can now specify properties such as:
1. Calculations (on/off/flow)
2. Fluid Type
3. Fluid Temperature
4. Graphic Overrides
5. System Abbreviation
In general, prior to System Types there were a few different ways users were solving the end goal of 'grouping' elements to control their visibilty. I.e., in 'View A' I want to see this group of components this color, but I want to hide these other things, and in 'View B' I want to see this other group of things, and hide the rest. Futher, I want to be able to easily tag an abbreviation on the pipes/duct. Worksets were one option, Pipe Types (and duplicated fitting types) were another, a project param helped solve the problem of tagging, but was difficult to maintain on all the pipes. Additionally, there was a frequent desire to route a pipe for a particular system without it being connected to other elements... for example, to coordinate a chase or a ceiling cavity with the pipie mains indicating their services.
When you interconnect pipes from different systems, but are the same system type, as you have found, the systems will merge... there is a logic here, for example, if you trim two pipes of different systems, I beleive the first selected pipe controls which system 'rules'. If you connect one pipe into another, the pipe you are editing will 'rule'.
Hopefully that provides a little more insight into the whys. If you have scenarios where you are getting unexpected results, please provide the scenarios/details.

Martin Schmid
Product Line Manager
Mechanical Detailing and Electrical Design
Architecture, Engineering, and Construction
Autodesk, Inc.