I noticed Debian does this by default and Arch wiki recommends is citing improved security and upstream.
I don’t get why that’s more secure. Is this assuming torrents might be infected and aims to limit what a virus may access to the dedicated user’s home directory (/var/lib/transmission-daemon on Debian)?
Not only that: It protects your data. The Unix security model is unfortunately stuck in the 1970s: It protects users from each other. That is a wonderful property, but in todays world you also need to protect the users from the applications they are running: Anything running as your user has access to all your data. And on most computer systems the interesting data is the one the users out there: Cryptogrqphic keys, login information, financial information, … . Typically users are much more upset to loose their data than about some virus infecting the OS files, those are trivial to fix.
Running anything as anlther user stops that application from having access to most of your data.