It about the gps accuracy, that will fall with increasing KP. On another project (auto quad) we monitor the horizontal and vertical gps accuracy. With a kp <4 the hacc is between 30-60cm, about kp4 it becomes between 100-200cm or worse.
in short, with higher kp, the position hold becomes less accurate and can become a problem
When flying at higher altitudes above ground level you probably will not notice due to your perception of the copter, but it will swing a bit more with higher kp
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