I attempted to use this feature in Wasabi right after it was released. What I found was that it outputted the coins to the new output wallet after only one round of coinjoins, regardless of the privacy scores reached in that round. I assumed that it would continue to mix the coins within the original wallet until it reached the privacy score that I had set and then on the final coinjoin round it would output to the configured wallet.

My use case is to receive new coins to a hotwallet within Wasabi and then coinjoin them and transfer to a hardware wallet that is also configured within Wasabi. I was hoping this feature would save a transaction at the end of the rounds of coinjoins, but it didn't work the way I was expecting.