By enabling this option, the application will not prompt for a username/password when connecting to the database. The assumption here is you do not require a password to connect. This will apply to the following scenarios:
The passwords are hard-coded in the server (applies to the Multi-Tier drivers);
The database server does not require a password to connect;
The application will pass the userid/password using its own method.
The only exception where enabling this option will still prompt an interactive login is when creating a new data-source.