Kasa App - third party capability setting - what does it do?

Hi,
I have several Kasa smart switches. When going into the Kasa app, there is a setting called ‘Third-Party Compatability’. It defaults to Off which is interesting because Home Assistant is able to interact with the switches just fine.

If I go into the setting, a warning is displayed that says:

When enabled, your smart devices integrate seamlessly with third-party ecosystems like Home Assistant boosting your smart home connectivity. Disclaimer: Enabling this feature for compatibility with open-source platforms like Home Assistant may introduce certain privacy risks.

Does anyone know what this setting in the Kasa app is doing and what ‘privacy risks’ it is talking about?