If I take a digit like $5$ (say in m) and multiply it by a digit say $5$ (in m) then I will get $25$ ($\mathrm{m}^2$---an area). Now, $5$ can be expressed in Scientific notation as $5 \times 10^0$ to show that it has $1$ significant digit. But then what would the product result $25$ be represented as when expressed to $1$ significant figure using the Scientific notation? $3 \times 10^1$ means the product answer is $30$ and is not $25$. Now $30$ m is far from the correct $25 \; \mathrm{m}^2$.
I have seen the rule that a product of two numbers cannot have more significant digits than any of the multiplicand or the multiplier. And I have read that it is good to use the Scientific notation when working with significant figures to avoid spurious significant digits.