Mechanical insulation in the BUILDING SECTOR is defined to include education, health care, institutional, retail and wholesale, office, food processing, light manufacturing, and similar applications. This is often referred to as the commercial sector.
Mechanical insulation in the INDUSTRIAL SECTOR is defined to include power, petrochemical, chemical, pulp and paper, refining, gas processing, brewery, heavy manufacturing, and similar applications.
This means that the shortest answer is that mechanical insulation is used to insulate equipment and processes, as opposed to building envelope insulation that would be found in walls and roofs.