This connection parameter is used to set the MYSQL_DEFAULT_AUTH option of mysql client library. This option was added in MySQL 5.5.7, thus this connection string parameter has an effect only if Direct is set to false and a client library with version 5.5 or higher is used.
This option may be omitted because the client may receive the name of the authentication plugin when performing handshake, but you may use this option to shorten client/server negotiation and avoid a round trip in the protocol.