With manifest v2, extensions could block the content however they wanted, reading and modifying DOM as they see fit.
Google claims that it is a security risk, so with manifest v3, extensions can only create and give the browser rules and the browser itself will block content based on them. The rules have a limit in size and capabilities.
If that was still not clear, try thinking of unrestricted SQL access vs a UI for modifying a database.
With manifest v2, extensions could block the content however they wanted, reading and modifying DOM as they see fit.
Google claims that it is a security risk, so with manifest v3, extensions can only create and give the browser rules and the browser itself will block content based on them. The rules have a limit in size and capabilities.
If that was still not clear, try thinking of unrestricted SQL access vs a UI for modifying a database.