Why this option is turned off by default? Does it mean it has some downsides? When should I turn this on?
Short answer : Don't touch anything in Battery Optimization
Long answer:
In that three dot menu in battery settings, there are a couple of options... "Battery Saver", "Battery Optimization", and "Help & Feedback". The last is self-explanatory.
Battery Saver is a mode to reduce your power usage in times where your battery level starts to run low. It reduces the speed of your processor, reduces background processes and data, etc. It's like a low-power mode to help you get more time out of the remaining charge. The window inside is also pretty self-explanatory.
Battery Optimization.... it's a little vague. But that window basically controls two new features to Android 6.0; Doze and App Standby. (
look here for a full explanation)
Doze is a new mode that will monitor the phone and if its sitting still on a stable, it'll start to restrict what the phone is doing in the background. The point is that if you plop your phone on your desk and leave it there for a few hours, or overnight on your nightstand, the phone will end up using less power than in previous releases of Android. To give you an example... my old Nexus 6, 5.1.1, if I just put it down, I'd see a pretty constant 1, 1.5%/h load with it just sitting there. With 6.0, if I leave the phone be, I'll see that number drop to as low as 0.25%/h. From 12am to 6am, my 6P usually only drops 1, maybe 2% total.
App Standby looks at your usage and if an app isn't getting touched for an extended amount of time (think days), Android will kind of disable it, so the app will never wake up the phone until the next time you launch it.
The two work in tandem to try to reduce extraneous power drains... and they work quite well.
Back to that window. There are two parts... "Not Optimized" and "All Apps". The two apps listed in 'Not Optimized' are critical system processes that are permanently excluded from either Doze or App Standby.
All the other apps are listed under "All Apps", with their setting included in the window
Now, you can go in and start excluding processes from optimization, but that will quickly defeat the purpose. The more apps you exclude, the less effective Doze will be.