@bharatn at the bottom of you picture, it says "Show Details". perhaps clicking on that will provide some of the granularity you're looking for.
If it's DB requesting to Microsoft, it'll be DB being able to see the PBI workspaces. I think the bottom statement is useful, "Maintain data you have given it access to".
Across the various Power BI workspaces you have, there will be plenty of Semantic Models (Datasets). Databricks isn't going to need to read these nor would it need to. I think when it says Read and Write all Datasets, it'll be based upon the data you've linked in the Power BI dashboard (again, hopefully "Show Details" helps with that)
Here's the Databricks Documentation based on your query: https://learn.microsoft.com/en-us/azure/databricks/partners/bi/power-bi

I bounced this query off AI aswell. I think this provides a better answer than me:
What Do These Mean?
1. Workspace.Read.All
This refers to Power BI workspaces, not Databricks workspaces.
It allows the integration to read metadata about your Power BI workspaces—such as listing available workspaces to publish to. So to your question: when it says "read all workspaces," it's about your Power BI environment, not the Databricks side.
2. Dataset.ReadWrite.All
This allows the integration to create new Power BI datasets, update existing ones, and potentially modify their data or structure.
In practice, this permission powers the ability to publish Databricks tables (including schemas and relationships from Unity Catalog) into Power BI semantic models (datasets)—either new or existing.
This does not mean that Power BI is reading or writing your Databricks tables. Instead, Databricks uses this permission to manage Power BI datasets—essentially creating or updating the Power BI semantic models based on your Unity Catalog data.
3. Content.Create
Hope that helps @bharatn
All the best,
BS