Specifically, the issue is that the confirmation dialog does not give you any indication whether a single line of text contains a CRLF at the end or not. Because of this, it's not useful if you want to use the feature to prevent yourself from accidentally sending text immediately after pasting before being able to edit it. The dialog does not give you any way to distinguish between "test\r\n" which would immediately be sent after pasting and "test" which would not.
To correct this would be simple, requiring only one change: never show a confirmation dialog if pasting would not cause text to be automatically sent, even if the setting is set to 1. That would make the setting of '1' be useful, since it would allow you to distinguish between pasting "test\r\n" and "test", as I explained above.
