This is strictly in-between allowing third-party cookies and blocking them. They are allowed, but isolated to prevent data sharing.

Previously: Site A has a facebook Like button, which iframes in facebook.com and sets a third-party cookie for facebook.com. Site B does the same. Site B can see that you previously visited Site A, and if you have a Facebook account, then Facebook can connect your browsing activity on both A and B to that account.

New feature: Site A's Facebook Like button iframes in Facebook, and sets a cookie on facebook.com. This is a different cookie than the one Site B sets for facebook.com. The cookies cannot tell that you're the same person. If you have a Facebook account, your browsing activity on A and B is not connected to your Facebook account.