"Legitimate interest" is a concept from GDPR, which is the EU's major legislation around digital rights. "Legitimate interest" is an extremely soft concept that basically says "a company must have some reason that is not obviously bullshit to process your data." That includes advertising. "We need to know your age, gender and city so we can decide what ads to show you" is considered "legitimate interest." See? Soft.

What it doesn't cover is "We just think it's desirable to accumulate as much data as we can about you for no particular reason and maybe we can just sell it one day, idk." That would not be considered "legitimate interest." Similarly, asking for e.g. a user's phone number but having no particular explanation for why you need it would not be "legitimate interest."

So when you see "legitimate interest" cookies as a category, you can interpret that as "cookies that have some purpose-- including advertising-- as opposed to literally no purpose other than superstitious data hoarding." Block them.

They're legitimately interested in selling your data to paying parties.

I asked a similar question a little while back: https://lemdro.id/post/10600532

It doesn’t really mean much, it’s more of a loophole from what I gathered.

It'sintended to be used when the cookies are actually required for the app to work. For example, to preserve your login, you need a cookie, no way around. Unfortunately, as mentioned by others, it's often abused

It’s to differentiate the predatory ad-targeting/consumer-profiling cookies you’re meant to keep from the placebo ones you can turn off to feel more comfortable sharing your data with the data miners.

The GDPR prohibits processing of personal data, unless there is a legal basis for it. Personal data covers a lot more than you think, as does processing.

What counts as a legal basis may be seen in Article 6 of the GDPR. Consent is one option, but it must be informed and freely given; a very high bar. If you have a legitimate interest, you may process data without prior consent. However, you must still provide the "data subject" with information and give them the option to opt out. They must tell you the legal basis, which they have done, but also what exactly that their interest is. (And a couple more things.) There should be a statement somewhere containing that information.

The GDPR gives "direct marketing" as an example of a legitimate interest. Some DPOs interpret the term extremely narrowly, though. It's a contentious issue. The courts will work it out over the next few years.