How Essential is the Unofficial Patch?

What does it actually fix? any examples?

Benefits of Unofficial Patch

Few notable examples include:

Fixing massive spam from DLCs, when game attempted to load resources from them, before they were initialized.
This thing, which managed to reduce the lag significantly for settlement builders, including modded processes:

WorkshopParentScript: To improve performance, the ResetWorkshop() function and the “core functions” that handle actor and object assignment have been completely rewritten. Workshop resets are now 25% faster, on average, which is significant but admittedly only a minor improvement for overly large workshops. The resource assignment procedures however, which run in regular intervals while the player stays at a workshop and also are called every time a resource object is built are more than 90% faster now. This greatly helps in reducing the number of threads that are alive on WorkshopParentScript at the same time and makes script lag issues that could still occur after the reset had finished running less likely. This also required minor modifications to WorkshopScript and WorkshopObjectScript. (Bug #24312).

And these welcomed fixes:
- WorkshopParentScript, WorkshopScript: The current workshop tracking variable should now be updated properly when visited, and when the player leaves. (Bug #23016)
- WorkshopObjectScript: Initial workshop setup is called twice but does not need to be since it will reset when the player visits for the first time anyway. (Bug #23017)
- WorkshopAttackScript: Prevent a settlement from calling its workshop reset while it is under attack. This solves both thread locking and performance issues. (Bug #21895)
Short wait period for resource calculation, to avoid resource detection bugs in settlements.
Fixed settlement target locations, preventing bugs and issues in certain quests (like Mercer safe house getting messed up, due to wrong information between Outpost Zimonja and Abernathy Farm.)

They actually have release notes. I took the Workshop system as example, because it is the most buggiest and forum gets a lot of questions from that. However, fixes are plenty and go far beyond Workhsop system. You can search release notes for information that might be more relevant for yourself.

I would strongly recommend the patch. If you want the best service, then toss in this one as well. It fixes a bunch of issues, which UFO4P do not want to address. This includes cutting the 1 single and super slow quest for running the settlements for dozens of smaller quests. This prevents several issues, where workshop scripts could get locked.