Why would a doctor cauterize the pocket?

Cautery is used by all surgeons during breast surgery to control bleeding so it is not an old technique.  I'd suggest you simply ask you plastic surgeon what she means by "cauterizing the pocket".  Perhaps they mean making the pocket larger to accommodate the bigger implant?  They will be able to provide more details.

Best to clarify with your plastic surgeon. Cauterization alone, in my opinion, will not suffice when it comes to providing you with additional support.  The additional support, otherwise known as an “internal bra” is best done  (in my opinion) after removal of a segment of the capsule, the use of internal sutures ( capsulorraphy) and (sometimes) with the use of additional supportive material such as acellular dermal matrix or biosynthetic mesh. Again, make sure that you clarify your concerns and are on the same page as your plastic surgeon prior to proceeding. Best wishes.

has been mentioned to help shrink the pocket but it was used in conjunction with sutures.  If you are confused about what is going to be done, you should spend time clarifying what your procedure will do to ensure it provides you the result you desire.

That's a question for your doctor, but if the pockets are too big they can be reduced by first cauterizing the tissues to shrink them and then oversewing. Otherwise the only function of cautery is control of bleeding.