When you login to your password manager instance this addon will create a local copy of your account (containing all passwords) using http or https depending on your password manager instance(please enforce https!).
The local copy of your data will be deleted after the timeout set in the addons options expires or you logout of your password manager.

Your usernames and passwords will be entered on third-party websites when you choose to use the context menu entry. Otherwise your data won't be shared to third parties.