Interaction happens when people from one set meet people from another set. The area where they meet is usually the boundary between the two sets. This is evident in natural environments, where the areas richest in ecological diversity tend to be the areas where one environment meets another, such as the hedgerow in between field and forest.

Building on this boundary essentially takes possession of this interactivity, and might hopefuly take advantage of it. The traffic through it makes it not so much a "wall" or a boundary, as a transition area. Whether or not the people upstairs are aware of it, the building becomes a part of the interaction going on between the areas on either side. Furthermore, this gives the building two faces: one into each set, both views being appealing in its own way.

The trick is to encourage the interaction to happen. Place de la Cathedrale does something similar, but there is very little reason (I find) to enter the courtyard, and so the building surrounding the courtyard never really becomes a part of any interaction between the street and the courtyard within.