It allows Kontakt to recognize and manage libraries that might otherwise require specific activation, particularly third-party or older "non-player" libraries.
The major version jump to Kontakt 7 was driven largely by the need for a HiDPI browser and a revamped user interface, rather than fundamental architectural changes.
Some users have found that after updating their antivirus software or making other system changes, the "Add Library" tool no longer functions. In extreme cases, the security software may have quarantined or removed the Kontakt Button.exe file. The solution is to restore the file from quarantine and add an exception for the Kontakt folder in your antivirus settings.