Smelling — When rabbits joggle their noses, sebaceous glands located on the mucous membranes are activated and create moisture. Like dogs, a rabbit's sense of smell is enhanced by wet surfaces.
Breathing — Nose-wiggling expands the nasal orifices or nares, so that the rabbit can inhale more air.
Cooling off — Domestic rabbits can't perspire except for a small amount from their foot pads. Rabbits cool themselves by expiring hot air from the respiratory tract out the nose and from the convection of heat from their long ears . So if you're a hot rabbit, you must breathe faster to cool down. The normal respiratory rate of a rabbit is approximately 120 breaths per minute, but when the temperature soars so does the respiratory rate to 300-350 breaths per minute. And so does the nostril motion.
Tickling — When a rabbit's whiskers are touched, various muscles surrounding the nose contract as if tickled, resulting in oscillating nostrils and a spasmodic nose.
Worrying — When rabbits are secluded and calm, the nostrils will stay in a stationary position. But when the rabbit gets nervous its pulse, respiration and nose wiggling rate all increase in response.