The “why”:
This bowl was made to imitate traditional Islamic art bearing an Arabic inscription. Arabic inscriptions in Islamic art were not uncommon, for the language was very important to Muslims. This pseudo-Arabic text, however, visually resembles Arabic but does not convey any legible meaning in that language.

A small number of traditional Islamic art pieces included pseudo-Arabic as a protective element. As seen in the prayer rug featured below, the right side has pseudo-Arabic to prevent people from stepping on the Arabic around the other three edges of the rug. This pseudo-Arabic was intentionally put into the rug as a protective mechanism. 
The ceramic bowl in question would not have used the pseudo form of Arabic as a protective element.  The bowl was for decorative purposes. This suggests that the bowl was decorated by an artist who was not literate in Arabic, but who admired the Arabic language and Islamic artwork.  That artist might have been a Muslim or a Byzantine or a crusader.

The “how”:
Most early ceramic vessels were used for food or everyday household use. However, some pottery transitioned from being practical to being aesthetically pleasing. These elite ceramic pieces required considerable time and effort, including monetary investments, to create.  The “Byzantine or Crusader Bowl" would have been primarily used as a decoration in one’s home or in another kind of setting, perhaps even a church. It would not have been been heavily used for serving food or other practical purposes, for the lustreware would degrade, and the piece would lose its value.