This option would help us avoid constantly filling up students' inboxes with grade notifications, especially in courses with frequent assignments or lots of participation credit activities. Research indicates that overemphasizing grading in a course can reduce student interest in learning and enhance anxiety and extrinsic motivation, especially among those students who are struggling (https://www.lifescied.org/doi/full/10.1187/cbe.cbe-14-03-0054). Some experts more specifically worry that an overemphasis of grades through real-time grade notifications could lead to mental health issues (Mental Health Experts Worry Digital 'Open Grade Books' Are Stressing Kids Out | The California Report | KQED News).
Unfortunately, current Canvas settings do not allow instructors choice in how and when students are notified of grades. By default, students receive email notifications every time an assignment is graded. In classes that use varied and frequent assignments to monitor student conceptual changes, this default means each student might receive a very large number of grade notifications each day, with all the significant downsides of such frequent reminders of course grading (see above). Students can turn off those notifications, but need to be instructed how to do so, must make the decision and take the initiative themselves to do so, and can only do so universally (not for a specific course).
Moodle, among other LMS's, has solved this problem by including an assignment/grading setting that allows instructors to turn off grade notifications per assignment (see image of this Moodle option above). The default is still "yes," but instructors concerned about the issues described above are able to select "no" to turn off that grade notification. Notably, students can still see their grades in the gradebook if desired (unlike "muting" which hides scores from students). They just aren't spammed with emails about every single one of those grades.
Given that this increases instructor choice (without taking away any existing instructor or student features), has potential to avoid detrimental impacts on students and learning, and is already available in other LMS's, this seems like a feature that could be helpful in Canvas.