Leaving the toggle on will allow the Watch to learn your charging habits and adjust accordingly. Because lithium-ion batteries degrade over time if constantly charged at 100%, it should help lengthen the lifetime of a battery if you tend to charge your Apple Watch all night.
9to5Mac also reported that despite cool new features like this that watchOS 7 is to take away Force Touch, the hardware feature that allows you to press hard on the screen to perform a different action to tapping.
This makes sense given Apple phased out the functionality since the iPhone XR, and all new iPhones use haptic touch as a long press menu option instead of displays that can detect force. In its new Human Interface Guidelines, Apple says:
“In versions of watchOS before watchOS 7, people could press firmly on the display to do things like change the watch face or reveal a hidden menu called a Force Touch menu. In watchOS 7 and later, system apps make previously hidden menu items accessible in a related screen or a settings screen. If you formerly supported a long-press gesture to open a hidden menu, consider relocating the menu items elsewhere.”
It means that after a software update, existing Apple Watches are likely to no longer support Force Touch despite having hardware capable of it as apps change to use menus instead. It’s therefore likely that the Apple Watch Series 6 will not have hardware capable of Force Touch.