The Public or Private tag that can be assigned to douments in the library refers to where the information you are uploading can be found and it is useful in finetuning answers within the platform. When selecting the tags, please know that it does not mean your data is treated any differently, as it is always handled with the utmost security.
You can put these tags to work when uploading a form and selecting "Only private" or "Only public" within the knowledge base section of the Autofill workflow to ensure that documents with these tags are what the AI will use when responding to a form.