Currently it's only possible to align values across the X-axis.
Up and Down traverse the fixture tree-structure as defined in patch. If you're not using any Grouping Fixtures or any multi-instance Fixtures, then Up and Down aren't really gonna do much for you. But, if you are using either or both of those types of fixtures, you'll need Up and Down.
Consider a Magic Blade. You've got a main head with pan/tilt functions and master dimmer and strobe and control channels and such. And you've also got 7 individually-dimmable/colorable pixels. Thus you have Fixture 1 as the main head and Fixture 1.1 Thru 1.7 as the pixels. Select Fixture 1 and you're controlling the main head. Press [Down] and you've moved one level down the tree, so now you have the pixels only (Fixture 1.1 Thru 1.7). You change their dimmer and color, then want to go back to the main head, so you press [Up] to move back up one level in the tree.
If you only have one Magic Blade selected, this can be placed in the Selection Grid easily - Fixture 1 is at Grid 0/0/0 and when you go Down, Fixture 1.1 Thru 1.7 are spread across the X-axis (Grid 0/0/0 Thru 6/0/0). Now say you have 10 Magic Blades selected, arranged in a line across the X-axis of the Selection Grid. All well and good. But what happens when you press [Down]? The pixels can't spread across the X-axis because they'll overlap each other. So instead they expand into the Y-axis. Thus
The rule is that the sub-fixtures expand into the next free axis. If instead of Fixture 1 Thru 10 in a line you had them in two rows of 5 (e.g. Grid 0/0/0 Thru 4/1/0), now when you press [Down], the Y-axis is no longer free and you would get an overlap. Thus the sub-fixtures are spread into the Z-axis, like so:
Hopefully that clarifies things a bit.
But then, why can't we set or spread values or phases along y and x axes ?
I assume you mean "y and z" axes? The ability to choose the Align axis is just not implemented yet.