From man rm:
-i prompt before every removal
-I prompt once before removing more than three files, or when removing recursively; less intrusive than -i, while still giving protection against most mistakes
The problem is that you get used to this crutch and rely on it, until one day you're logged in someplace without the alias and end up deleting something you shouldn't.
I'm not a fan and normally disable it. Instead, I prefer to be very careful and deliberate when using rm, especially with any wildcards, making sure I'm in the right directory and that the pattern matches what I expect it to.
It forces me to be careful and deliberate. There's never a safe option or a backstop. I treat rm like a gun - always assume it's loaded and going to murder whatever I point it at without hesitation. If I'm not 100% sure about what I'm about to delete or how a wildcard will expand, then I echo it first.
I messed up once, about 15 years ago now. Lost a few personal files. Haven't screwed up since.
Which Linux distributions do this? I have not seen this alias set by default on any distribution that I've used recently (Gentoo, Linux Mint, Debian, Ubuntu, Crunchbang, Arch).
I can find old rpms and deb files with rm aliased in /etc/skel/.bashrc or /etc/skel/profile/aliases.sh, but the most recent I found is in a bash 3.2 package, so this practice seems to have stopped quite a few years ago.