It’s the threat of a good example right at the US’s borders. Even with the embargo, Cuba has free healthcare, housing, better LGBT rights, higher life expectancy, and a proper democracy unlike the US. A thriving Cuba might threaten the US capitalist class and force them to make concessions to the working-class, like the Scandanavian countries’ capitalist states had to for being near the USSR (though those have started being undone with the example overthrown).
And it’s not just sanctions, the embargo also prevents companies of other countries from trading with Cuba if they also do so with the US. Which the vast majority of them obviously have to if they want to survive competition.