Keynote Watcher is a system that notifies Revit that it needs to reload the keynote file. To understand that, here is a little background on how Revit interacts with the keynote file. When Revit opens a model it finds the keynote file for that model, reads it, and caches the keynotes it contains into its memory. From the remainder of your Revit session, Revit will use the data in its cache instead of directly using the file data. That means that any changes to the file will not be reflected in the Revit interface until Revit is restarted or the cache is updated. So how do we update the cache without restarting Revit? You can do this through the UI by going to Revit’s keynote settings and pressing the ‘Reload’ button, or Add-Ins can do it through the API.
Now let’s get back to Keynote Watcher. Keynote Watcher watches the keynote files for any open models and determines when a change is made to the file, meaning that Revit’s cache is now out of date. When that happens, it uses the Revit API to tell Revit that there are updates to the keynote file and that it needs to update that cache. Revit will then reload the file and you will see the updates in the Revit interface.
So why would you turn it off? Well unfortunately there are also some limitations of the Revit API regarding worksharing that make this a better option in some cases. For more information on that see the ‘Why do I get a popup…’ FAQ on this page. It’s important to note that Revit itself never writes to the keynote file, it only reads the data into its cache. Because of that, there is no danger in having the Revit cache out of data; this will not overwrite your keynote file or cause notes to disappear, etc. It will only mean that your Revit interface is out of date and will be updated next time everyone syncs and reloads.