When creating XMP file, the hierarchical tags are also added as a simple list of non-hierarchical ones to make them visible to some other programs. When this option is checked darktable will only include their last part and ignore the rest, so 'foo|bar|baz' will only add 'baz'.
The entry completion is useful for those who enter tags from keyboard only. For others, the entry completion can be embarrassing. (need to restart darktable)