The raw_html model is used in cases where you want to enter complete HTML tags by hand. Generally, this is rarely used since other models are usually more productive and mismatched or improperly formed tags can arise when you enter HTML by hand.
The HTML can be supplemented using $functions.
In most cases the tags model should be used instead of the raw_html model but there may be cases where you already have a snippet of html that you want to add to a page. In such a case you can paste this html into the raw_html editor and stow the raw_html under a certain name. Then, you can embed this html into any other page using the $page function.