I would imagine that if you’ve never heard of anybody doing that where you live, it’s a culture thing. Certain places have different practices on how they handle dogs. I want to stress though, much of the US doesn’t just do it because it’s simple and easy without any regard to the animal (at least not any good dog owners). To you, it may look like a prison, but to a dog properly crate trained, it’s more like a safe and comfy bed they can relax in. The positive effects crating can have on a dog is heavily backed by science, and I’d recommend looking into it, it’s actually kinda fascinating.

Of course, that all assumes it’s being done properly. Crates are a tool, and like any tool, they can be misused and abused. So it’s not always where they feel safest, it all depends on how you train them and certain issues a dog might have (claustrophobia, heavy anxiety, etc.). Generally, from what I understand, you never want to associate the crate with negative emotions or consequences (i.e. don’t send your dog to the crate as punishment). It’s supposed to be a safe place, not a jail cell.