This option is available for managed clients. The aim of protecting the SEP with password is when it is being used by limited users. When we install SEP as an unmanaged client the client has full authority over the software. This option is exercised in the following situations :-
When the user is a Administrator
When the number of clients is limited to 1 or 2
When we do not need a SEPM for administering client
When the client is not in a network or a stand alone machine