Still they are recommending people to use device storage permissions with "All files" permissions rather than the limited App Storage permissions.
They prefer that the users use the less secure option.
They prefer that the users use the less secure option.
The secondary reason is related to user expectations and file deletion. The device storage option behaves more like desktop in that if you delete Obsidian your files will not be deleted.
For people who are okay with the tradeoffs, app storage is now an option. That's a good thing, no?
There isn't a good reason to grant an app unlimited file access permissions.