Hiya Alex, (yes, this was just something you didn't know 😉 and, as always, the tough love is faster to type❤️)
I assume that "users having access to drive data" is still true?
It's a fairly safe assumption, unless you have disabled the Drive service.
So, yes, it's good to know what that button does, but nothing has changed, or wasn't clear.
It's even written exactly there what the setting does allow.

Allowing internal apps (there is no such thing as "internal third party apps") lets users develop or use open source scripts (even Google publish such mail merge scripts) to make their life easier. It doesn't change the access those user have to actual content.
The code they create will not suddenly give them access to other things than what they already have access to.
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Now... if you have a policy that nobody is allowed to send personalised emails with content from their Drive... then you have a case. If not, you just made people's job harder.
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https://wheretofind.me/@NoSubstitute