I didn't present it very well, but this upgrade allows them to start hose feeding you doughnut batter, which is extra fattening.
Sure! That's something I'd love to happen, for the player to experience Dizzy's addiction & for the feeder girls to revel in it as they watch the player helplessly succumb to temptation and fatten themselves with Dizzy's doughnuts.
It would also allow access to the Dizzy's town location even if the player hasn't unlocked it yet. I'll try and include this in the next update.