Ramifications of disabling Protected Mode

Can anyone inform me of the ramifications of disabling protected mode?

Since the release of the current version my org uses (2022.001.20169) it seems like having protected mode on has detrementally affected redaction sequences and VBA tools ("Server Execution Error") and disableing this setting seems to remove this issue.

Also does anyone know if you add a folder to a privalaged location, does it include subfolders as well?