Alternative text is the text associated with an image that serves the same purpose and conveys the same essential information as the image. In situations where the image is not available to the reader, perhaps because they turned off images in their web browser or are using a screen reader due to a visual impairment or of slow connection, the alternative text ensures that no information or functionality is lost. It is basically used to improve web accessibility.
When images are uploaded in WordPress 4.6.1 that have an empty alt text value, WordPress tries to generate one based on the caption text or the image title. If the image title is non-descriptive as is common with photos uploaded from digital cameras, the alt text can be meaningless.
However, in WordPress 4.7, the caption text and the image title fallbacks have been removed. The fallbacks were originally introduced to ensure every image included alternative text. Over time, however, this practice has proven to be a poor user experience for people who use screen readers.
Since the fallbacks are removed, users will need to explicitly set a value for the alt text field. According to Joe McGill, the change will not affect content already published but will be the expected behavior in WordPress 4.7 and beyond.