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Setting the policy controls the list of websites to open in an alternative browser. Each item is treated as a rule for something to open in an alternative browser. Google Chrome uses those rules when choosing if a URL should open in an alternative browser. When the Google Chrome when the rules don't match. If rules contradict each other, Google Chrome uses the most specific rule.
Leaving the policy unset adds no websites to the list.
Note: Elements can also be added to this list through the BrowserSwitcherUseIeSitelist and BrowserSwitcherExternalSitelistUrl policies.