I'd guess this is because it only works in ssh PTY sessions. So it would have no effect on tunneling or when piping arbitrary data through ssh to a non-interactive remote command (unless you use the -t switch to force PTY allocation even when stdin is not a TTY).
I'd guess this is because it only works in ssh PTY sessions. So it would have no effect on tunneling or when piping arbitrary data through ssh to a non-interactive remote command (unless you use the -t switch to force PTY allocation even when stdin is not a TTY).