When trying to enable the dictation feature on macOS, the popup is telling me that: "To help your Mac recognize what you're saying, other information is sent as well, such as the names of your contacts."
I guess it uses your contact information to get the names out of your voice.
e.g: "Send a message to Lemony Snicket" would be easier to understand when the voice processor knows there is someone called "Lemony Snicket" in your contacts.