When an image is watermarked by a third party website such as an image gallery, wallpaper site, or an anime or gaming website displaying official art.
Third party watermarks are discouraged on Danbooru, since they are regarded as flaws that should be addressed by someone finding a watermark-free image and uploading it. This tag is to be used to identify images that do not have a watermark-free parent yet. Once one is uploaded, the image with the third party watermark should be made a child post and flagged. Also, images that are already deleted due to third party watermarks do not need this tag - this tag is for active images.
This tag implicates third-party_edit (learn more).