How Does "Automatic Kwallet" Work?

What, exactly, does “Automatic Kwallet Active” mean?

I know about entering an empty password initially and then checking “Always accept” when the prompts appear.

Is that what’s going on here? Or, is something more clever at work?

That is what is going on, so the whole process is hidden.

Can you give some more information about this?

When I set empty password, is my passwords saved in kwallet stay encrypted?

Does this encryption depends on user password?

Does it re-encrypted when user change password?