The feature, known as Windows Update Delivery Optimization (WUDO), is initially designed to help users get faster software updates, which is quite a good idea to handle massive internet traffic of up to 40 Terabits per second (TBps).
WUDO works a lot like torrents work. Your computer running Windows 10 is used as part of a peer-to-peer network to deliver software updates faster to others, each person distributing a little bit of the files across multiple computers and helping everyone download updates quickly.
But, this peer-to-peer sharing method offered by Windows 10 is using your precious Internet bandwidth, without hinting you about it, because the feature is enabled by default in Windows 10 Home and Pro edition. WUDO is also enabled in Windows 10 Enterprise and Education, but only for the local network.