Why do I need to flatten the transparency?

[emil...@adobeforums.com]

Hi I have an Illustrator SC2 file with some vector work and a placed Photoshop image in under the vector graphics.
The Photoshop image contains no layers and has C,M,Y, and K channels plus a spot color channel. This makes Illustrator treats the placed image as a transparent object and shows the following warnings in the Summary section of the Print dialog box:
“The document contains artwork that requires flattening”
“The document contains overprinting”
Well I do need the overprinting but I wonder if I have to flatten the transparency of the linked image when saving the file for an offset printing. When I flatten the transparency Illustrator chops the image into smaller rectangular sections but it beats me as to why this needs to be done.
When I print the file without flattening the transparency as PDF in Separation mode, the saved PDF file contains multiple pages showing each channel on a page including the spot color channel separated properly.
I wonder why do I need to Flatten the transparency and what difference this makes?

Any ideas are greatly appreciated
Thank you
Emil