It means that in the future you can’t use old iPhone hardware to run an unattended server or similar anymore (unless you simulate user activity by adding some hardware that taps on the display every three minutes, or something). This is why I don’t like that it’s a hardcoded non-configurable setting. It cripples potential use cases for the hardware.
Not a phone, but at my old apartment I used to have an iPad mounted on the wall. It was a dynamic weather display, Ring doorbell answerer, multimedia control, etc. Would suck if every 3 days I had to enter my passcode again.
I haven’t tested this, but I assume this wouldn’t occur if the device is fully unlocked and powered on. Most kiosk adjacent deployments are setup so that they never turn the screen off and remain unlocked.
I have something like this as well, connected to my Apple account for calendar and reminder access etc. I wouldn’t want every random guest to have access to that.