Ok, Microsoft, why is this even an option?
@fjfish dunno, probably because there is belief you can use some device without any kind of keyboard.

@ljgww_rb got a pen and a keyboard. Handwriting recognition isn't very good

Or my handwriting isn't very recognisable ;)

@fjfish there is another theory for this: if you have seen some 'surface' tablet/PCs that has detachable keyboard this setting is probably related to that. If you have tablet connected to kbd there is no point to show on-screen keyboard, on the other hand if you detach keyboard you need to somehow type the text. For a while I had setup where I had PC connected to tv but used air-mouse with keyboard, sometimes onscreen keyboard came handy (better than one on air mouse). But I am not on windows.