The main idea behind it is to improve the creation of tab groups for the user. The process is automated when the feature is used, which means that you do not have to create tab groups manually anymore and put tabs into them.
Edge sends information about all open websites to a Microsoft server when the option is selected. The AI processes the request then on the server and returns its suggestions after a moment.
While the automatic tab group creation features of Edge and Chrome look useful, privacy conscious users may want to skip those and create tab groups manually instead.
Having your entire list of open websites submitted to a company server without really knowing what is done with it and how it is stored outweighs the convenience of the feature.
I switched from MIUI (xiaomi android) to LineageOS a month ago now and my experience has only been better. There’s no google, it’s way less bloated compared to MIUI or any stock android so I think it’s actually faster. Though I must say that while it increases your privacy, it decreases the security of your phone because of having an unlocked bootloader but that’s mostly a concern for a threat having physical access to your device, and that’s something I’ve accepted. If you have or get a pixel phone then you can install GrapheneOS which is also very much secure while being google-free and high-privacy. I can’t buy a pixel so I’m with LineageOS right now. I highly recommend it, compared to Apple.