Purpose of this screw on my mountain bike's (BCA 29SC) rear dropout/derailleur and how to fix?

The derailleur you are using has an integrated adapter claw. A rear derailleur hangar claw. The bolt you have circled is used with a special washer to properly orient and secure the claw, which puts the derailleur in necessary position and alignment to the cogs for good shifting. This bolt has little to do with the axle alignment of the wheel and once it is in correct position with it's special washer/nut and secured, it shouldn't be loosened. Occasional inspection and possibly re-torquing the bolt to an appropriate tightness is all that is necessary after install.

Typically with a claw hangar the special washer/nut has a rounded side which has a lip of metal around it's radius. The rounded end fits into the rounded end of the frame's right rear drop out--this helps position the claw hangar correctly. The lip around the perimeter, sits on the inside of the drop out, following the arched perimeter of the end of the dropout. Tightening the bolt into the washer/nut brings this lip tight to the inside of the dropout and acts to secure the claw hangar to the frame.

When you want to adjust the wheel, you need only loosen the larger axle fixing nut. Loosen both the right and left axle nuts, center the wheel fully in the drop-outs. The axle will be touching the claw's fixing washer/nut on the right. The left axle may have a bit of gap between the closed end of the dropout and the axle. This may be necessary for proper wheel alignment and centering. Tightening the axle nuts up again, go back and forth, right to left, more or less tightening the nuts up together. This preserves the centering of the wheel since one side is not becoming overly tight compared to the other side which can cause deflection of the wheel in the dropouts.

For clarity, I've included a photo of a universal derailleur hangar with the same fixing system as your integrated claw hangar. This highlights the specially shaped nut which sits in the end of the dropout. The hangar is then fixed in correct position by the clamping force of the lip at the inside and body of the hangar outside as they are drawn together by the tightening bolt.