I suspect this mostly refers to "Code Protect" or similar functions, that are designed to stop the user for extracting the firmware from a device in the field. Typically, when this is enabled, large parts of the debug interface stop working, and turning it off requires a "secure" erase, that clears the loaded firmware.

While many CP implementations are flawed, or can be bypassed by a skilled attacker (power glitching, &c), I wouldn't say they are purely theater, as they raise the required investment from a <$10 ISP to $$$+ for something like a chipwhisperer.

Consider that in other fields of computer security we treat a device where attackers have physical access to be de facto compromised.

Even with chip security features this is still the case (if an attacker gets their hands on it it can be compromised). There's no chip that exists that I'm aware of that can't be compromised to have its firmware dumped.

It's like locks: Every time a manufacture claims to have made an unpickable lock someone goes and picks it. It's the same for chip security features.

Microcontroller "security" features really are security theater and not actual security. The only real reason they exist is because certain vendors/"big buyers" will require it as part of their parts checklists (which is silly) and it provides a way for chip manufacturers to wriggle more money out of each sale.