Its honestly not that interesting! 😁
It's because there are 2 different markets and they need to be kept as 2 markets in order to maximise overall profit.
I'll start by saying that I didn't work for the manufacturer of Andrex, but I'll use that brand as it's so well known, and I'll simplify to ignore retail margins, etc.
Manufacturer makes massive volumes of Andrex brand and sells them at 50p per roll. Because they're such large volumes, they're turned out at 25p per roll (total cost of goods sold - COGS).
Manufacturer also makes Value brand toilet rolls which they sell at 35p per roll. Because they don't make anywhere near as many, the lower quality raw materials aren't cheaper and, when you factor in extra change-overs to run them, the COGS is now up to 26p with a lower quality end product.
Alternatively you could just use the same materials and only change the wrap, so they'd cost still cost to make. But then you'd effectively be selling Andrex at Value prices and once consumers got wind of that, you'd soon be selling all your volume at 10p margin, not 25p margin.
Instead, you could use the same higher quality materials to save on changeovers and just add a bit of black dye to grey the paper slightly, use thinner walled cores and worse perforating blades so the rolls squash and the sheets don't separate as well, (but this can add a bit of cost too in changing over and more different materials stocked.)
Its all about protecting your premium market while still making some (but less) money selling to the value market too.
The same thing happens with cars, for example, where you can pay a lot more for a particular model when a lower one just has some electronic features disabled and some fancy wheels that really only cost a few £ more. If they switched all the features on, no one would buy the higher model and so profits would be lower.