Max AC recirculates inside air that has been cooled once and runs it through again. You get stale air that cools down quickly. Once the car is cooled, you switch to the less-efficient regular AC that brings in the hotter but fresh outside air.
There is always humidity in the air. The goal of the AC system is to lower the air temperature only 20 degrees. The real comfort comes from the humidity being removed by condensing and dripping onto the ground. When you use defrost, the AC runs to remove the humidity first, then the air is warmed up to blow onto the windshield. Without the AC, the moisture in the air will condense on the cold windshield causing fogging.