There is a designed in logic for pto speed at certain engine speeds. The engine's torque curve.
The engine's torque curve will look like a small mountain with an up slope, a peak and then a down slope. This curve is advising you of the engine's torque output at various rpm's.
This graph is for a higher rev'ing gasoline engine but the physics are the same.
I have marked three numbers on the blue torque curve, 1, 2, & 3.
The tractor designers will have adjusted gear ratios in order to have the 540 pto rpm occurring between #2 and #3 on the graph.
For sake of an easy explanation, assuming you are powering a pto driven generator and are loading the generator near to its maximum output.
A sudden increase in electrical load, say a AC unit trying to start, will see a sudden torque need increase applied to the tractor's pto by the generator.
If your tractor is running just past the engine torque peak, as the engine accepts the additional load and slows down in rpm's, the torque it can put out actually increases as the rpm's slow towards position 2 on the torque curve.
The aspect of the design avoids the possible sudden stalling of the engine when subject to a sudden load increase. If you were operating your tractor at a position between 1 & 2 on the torque curve, a sudden load increase slows the rpms and the engine can only put out less and less torque as it is operating before the torque peak is reached.
If you have an abundance of power for the implement you are using then the torque curve has little relevance. However, tasks like snow blowing and mowers can be high torque requiring implements and your tractor should be operating with the torque curve in mind.
If your implement has low torque requirements, then the low speed pto setting is applicable to save fuel.
Dave