Restricted Content Discovery in SharePoint – What It Really Does (and Doesn’t)

When Microsoft introduced Restricted Content Discovery for SharePoint, the feature sounded like a strong privacy enhancement. Many assumed it would simply stop Microsoft 365 Copilot from accessing certain files.

But reality is – as so often – more complex.

❓Does it actually stop Copilot from accessing the files?

Not exactly.

If a user hasn’t interacted with a file (hasn’t opened it, isn’t the owner, and hasn’t referred to it directly), Copilot will not use it in its response. That’s helpful in reducing accidental oversharing of content.

But…

➡️ If a user owns the file
➡️ If the user has opened it recently
➡️ If the file is referenced directly in a prompt

…then Copilot can still use the content, even if the library is marked as “restricted.”

🧱 What this setting actually does

The SharePoint setting under Advanced Settings – “Prevent Microsoft Search from showing items from this document library in search results” – is a visibility control, not a security measure.

It prevents Copilot from grounding answers in files that the user isn’t aware of. This helps with:

✅ Contextual boundaries
✅ Preventing Copilot from „hallucinating“ based on unknown data
✅ Reducing noise in AI responses

But it does not prevent access in all situations.

🔐What to do if you really need to restrict content

If you’re working in regulated environments, with legal hold scenarios, or just want to control information flow tightly, you’ll need more robust tools:

✅ Microsoft Purview Sensitivity Labels

Define content as confidential and specify if it should be used for AI grounding.

✅ Microsoft Purview DLP Policies

Block sensitive files or document types from being used by Copilot across Microsoft 365.

🚫 Exclude the site from Microsoft Search index entirely

But beware: this also breaks SharePoint search, eDiscovery, and many user-driven experiences.

🧠 Final thoughts

Restricted Content Discovery is a useful feature for limiting accidental content exposure in Copilot – but it’s not a compliance feature in itself.

Think of it as an AI relevance filter, not a gatekeeper.

If your organisation needs to prove that certain content is never surfaced by Copilot, or that it remains strictly internal, you’ll need to combine this feature with Purview tools, proper classification, and clear governance policies.

🔗 Official documentation:
👉 Microsoft Learn – Restricted Content Discovery