How specifically does "Update Data On Demand" toggle on or off affect performance/function/operation of WealthLab?

I used to think the answer to this question was the obvious. This obvious answer would be: If WL accesses real-time data in a strategy run, then this data is written to the corresponding location in Data Manager if "Update Data On Demand" is checked on.

I now doubt this answer because I have noticed that Data Manager does not seem to be updated after running a Strategy that accessed data in real time that was not already written via the Data Manager update. In other words, this data was not written to the Data Manager because when I run the Data Manager update, I notice that the data that was previously accessed is now getting re-accessed and written to disk. I have seen this on more than one occasion.

The other reason I ask this question is because we are told to toggle off this option when running a strategy. Why is this?

How does toggle off of this option improve performance or operation of WL if the data is not written to disk like I claim above?

What does toggle on/off of this option do exactly?

On demand data update requests missing static data, penalizing strategy's performance when running large backtests, or when a symbol doesn't have data at all, or when the market is open etc. - which is especially noticeable when working with intraday data. If on demand update is on, the backfill data are saved to the static DataSet otherwise they're not. It's recommended to keep your DataSets up to date using the Data Manager to avoid the delay.