If Enhanced diagnostic data is enabled it must be limited to the minimum required to support Windows Analytics.
Some features may communicate with the vendor, sending system information or downloading data or components for the feature. Limiting this capability will prevent potentially sensitive information from being sent outside the enterprise. The "Enhanced" level for telemetry includes additional information beyond "Security" and "Basic" on how Windows and apps are used and advanced reliability data. Windows Analytics can use a "limited enhanced" level to provide information such as health data for devices.
How this relates to the STIG checklist: STIG vs SCAP benchmark.