Other than decoration, not much as far as I can tell. The only reference I remember was in the 1.0 manual stating that the Moonkeepers like to use face paint, but not specifically decorations, but didn't elaborate on the reasons for that - it's probably just a trait that defines Moonkeeper culture from Sunseekers. It's possible it might have something to do with showing reverence to Menphina, the goddess of the moon, but that's a very big assumption on my part. This is what the 1.0 manual stated on the subject:

Quote Originally Posted by FFXIV version 1.0 Collector's Edition Manual
"The custom of applying war paint to the face is still regularly practiced by Keepers of the Moon, enhancing their already distinctive appearance."