Once activated, this addon acs as a proxy between the user and external image resources.
If external images are to be shown, like avatars or embedded images, the server retrieves the image and the local link is sent to the user.
By using this proxy, the server hosting the original image cannot retrieve personal information of the user like the IP address, User Agent or Cookies.
However, the remote server will be able to track the IP address of the server hosting the friendica installation.