What does it mean when add-on says it gets "access to all your data from all websites"?
Some add-ons, that when you go to install, ask for your permissions on accessing all your data from all websites. What does this really mean? What's the extent to which the data is being accessed and is our privacy still being looked after once we do give these permissions?
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A lot of extensions explain on their Add-ons page or on their own website why they need specific permissions, so you can always check that out.
See also:
I think that particular message is displayed when an extension can run on every page, not limited to particular websites. The extension could read the page contents and what you enter into it, and potentially use that data in a variety of ways. But there's a big difference between "could" and "will."
Firefox isn't able to tell you want the extension is actually going to do, only what it is obtaining permission to do. You should check reviews carefully before installing any extension. The Add-ons site has an automated approval based on a computerized code check, followed later by human review, so if an extension was just updated in the past few days, you might be extra-cautious.