@MA1985_CG See if this helps.
Last Authenticated Profile:
Tells Audience Manager to read data from the authenticated profile of the user who last logged in on the device.
When selected, Audience Manager will not write new trait data to the authenticated profile if the user is anonymous. Upon authentication, new trait data gets written to the user's authenticated profile.
So effectively this is using the data profile of the last authentication and an anonymous user can be targeted based on that profile, even though navigating in non-authenticated mode.