This compile option is now needed to make ps2stuff compile.
Ideally GCC would be able to generate perfect ASM code. However, there's still many EE instructions not supported by GCC.
As long as GCC does not support all EE instructions, it would be best to fix the inline assembly, and have better performance from hand-written inline ASM code in some specific functions where this makes sense.
See https://github.com/ps2dev/ps2stuff/blob/master/include/ps2s/cpu_vector.h