In general, Index classes are used to provide alternate access to selected instances of other classes. These serve a similar function as database indexes, but are not related to database indexes. Further, instances of Index- classes are maintained by Declare Index rules. The Index-CircumstanceDefinition class that you are referencing is a standard out of the box class that Pega provides to support the ability to search and report on circumstance-qualified rules.
This is what I have understood from above information. Let me know if I'm wrong.
When we create a circumstance rule by using a property, that property will be added to Index-CircumstanceDefinition class inorder to improve searching of circumstance qualified rule during rule resolution.
That is how Pega architected circumstancing concept. In my opinion, it's not to improve searching of circumstance qualified rule during rule resolution; but to find the circumstanced rule during rule resolution. Hope this helps.