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This is for authorizing an app to be a file manager. It's not a normal way for apps to access files/directories outside their app sandbox. It also isn't something they can directly request via a dialog. They can send you to the Settings app after telling you to enable it though.
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Support for the legacy file access system has been dropped from apps targeting the current API level. This is a remaining system for authorizing an app to be a full blown file manager. They could remove it, but many people would be quite unhappy about that happening so it hasn't.
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Look at the outcry against scoped storage being enforced with apps forced to use the system file manager. It was delayed for a year despite scaling it back and leaving support for requesting bulk access to indexed media (but not generic file access including non-indexed media).
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