That setting has nothing to do with facial recognition. Here’s what it covers. https://www.apple.com/legal/privacy/data/en/ask-siri-dictation/

It’s basically for allowing the voice assistant team to improve recognition by collecting references data, and for using usage behavior decide how to best sort search suggestions, when you like to use certain widget, and who should be prioritized in share sheet for certain apps at certain times. It’s pretty rudimentary.