What's there to be paranoid about? I don't know for sure, but it sounds to me like a feature to enable a user to track what's going on in his own computer, like maybe the NSA has some sort of requirement to make passwords centrally known by someone. Might be a stupid design (or might not, since I'm just some know-nothing speculating here), but it's not like you're going to set up your own system like that.

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