This solution is generated by ChatGPT, correctness is not guaranteed.

AI solution for Interview Question on BFE.dev
41. What is `keep-alive` in Vue.js useful for?

keep-alive in Vue.js is a built-in component that caches and keeps alive components that are toggled using v-if or through dynamic components. It helps in improving the performance of an application by saving time and resources consumed in re-rendering components.

When a component is wrapped inside keep-alive, it gets added to an internal cache object. Whenever the component is toggled or dynamically loaded, keep-alive checks if the component already exists in the cache object. If it does, it simply activates it again, without going through the created and mounted lifecycle hooks. This not only saves rendering time but also preserves the states and data of the component.

keep-alive is useful in situations where a component is frequently toggled or dynamically loaded in and out of the DOM. It is especially beneficial for complex components that have a lengthy mount process or depend on API calls to fetch data.

However, it is also essential to use keep-alive judiciously. Unnecessary caching of components can lead to increased memory usage of the application. Also, components that contain sensitive information (like user credentials) should not be cached using keep-alive.