Regenerative braking occurs in D as well as B. With the recent Prius version, no friction brakes are used much of the time, until you drop below the speed where regenerative braking is sufficient (about 7MPH) or panic stops. Regenerative braking is also used to simulate engine braking that an automatic transmission would normally exhibit.
In B, regenerative braking is a bit more agressive. Also actual engine braking is used where the engine is spun by the wheels, with minimal fuel (I believe some is used just to keep the engine from stopping). If you are using the engine to help stop, you're wasting kinetic energy to heat energy going nowhere useful. Also, I have found that once you stop in B, the engine tends to keep running which is another waste of energy.
You might ask, if regenerative braking is so good, (it can for the most part stop the car by itself) why use B to have the engine help decelerate?
Because the regenerative braking requires a place to store the recovered energy, which would be the battery. The battery has a fininte storage capacity. Once its capacity is reached, you can't have any more regenerative braking, so you start using your friction brakes. B would reduce the use of regeneration so you don't run out of capacity too soon, and uses the engine rather than the friction brakes to supplement the regeneration.
Use B when decending long steep hills, so you can use the engine rather than your pads/shoes to supplement regeneration braking.