It is really powerful and sometimes incredibly useful in some scenarios (e.g I once built a schema.org metadata system that scraped the pages on the fly for a site with a broken CMS). Simo Ahava does clever things with it.
But from what I can tell, it seems to be a way of avoiding communication between teams, or a political power grab inside bigger companies - a parallel CMS. And the silly bit is that it's normally not doing much more than could be achieved by copy and pasting a few lines of code into a template.
Of course it all loads only when the user does not have any adblocking or tracking protections enabled.
The important point is that it's a backdoor for marketing (and adtech) teams to get around developer/security requirements. At some point, someone on those teams gets frustrated that their one-line code requests (just load this script! add a gif banner here!) keep falling behind in the backlog. That happens in part because the product team often doesn't care about marketing, and sometimes because developers know that "just one more script!" paves the road to hell. At some point the third-party that's trying to get their business going through your business convinces the marketing team to add GTM, the marketing team says to the dev team "Hey we need GTM to implement THIS script". This time, because the other side has promised them $$$ in terms ROI, the marketing team pushes really hard for it, and eventually a product manager approves the request to get them off their back. The rest, as they say, is history (at retro time, multiple times down the road).
You can tell by the URL path (it's under /content/dam) that it's served by Adobe Experience Manager (Adobe's CMS, dam stands for digital asset manager, where you store static assets like images and js). The script itself is "target.js", which is Adobe Target - their A/B framework - which "supports custom code insertion"[1] similar to a tag manager.
It's not GTM, but this is like loading the GTM script itself from archive.org.
[1]: https://docs.adobe.com/content/help/en/target/using/introduc...
That's what's great about content security policies: put a CSP on the page, and when people try to add scripts without going through proper processes it just won't run.
Unfortunately, we still have lots of 3rd party stuff in GTM, and technically any ad can run random js on our sites. Thats where most problems come from these days.
Editors still technically have the power to brick a given site through our old inhouse CMS which has no proper access control levels, hopefully not for long...
If you configure your ad network to run all ads cross-domain, then they are very limited. For example, in GPT (which I work on) you call "googletag.pubads().setForceSafeFrame(true)".
(Disclosure: speaking only for myself)
All the processes and knowledge were in place to make sure all considerations were taken with our software with regards to security. But... all that good work and intention goes out the window when the marketing and analysis teams could pretty much, on a whim dump any old JS onto a production page via GTM. During my 18 months there, there were numerous issues (thankfully not security issues - at least that we know of) indroduced via this method inc a full outage of the customer onboarding journey.