Ok, thanks for the clarification to "Allow in the Background".
Currently, if an extension has no "background" permission in manifest.json on macOS, background scripts can't work when there is no browser window. If this is a bug (background script should work without that permission), I think the new change(don't add Chrome as a login item if the extension has "background" permission) is reasonable (I don't like it either).
I also tested it on Windows 11. When enabled the browser setting "Continue running background apps when Google Chrome is closed",
- If no extension adds the "background" permission, when the user closes the last window, Chrome quits completely. Therefore no extensions work.
- If one extension adds the "background" permission, when the user closes the last window, Chrome and extension background scripts still work.