Use it when sensitivity is part of the transmission
Confidential language is useful when the packet contains sensitive HR, legal, financial, or medical office information and you want the caution visible before the first content page appears.
Do not let the notice replace routing clarity
Even with a confidentiality notice, the cover sheet still needs the practical fields: recipient, sender, fax number, page count, subject, and a short message. If those are weak, the cover sheet becomes harder to use in a busy office.
Keep the language readable
The notice should be prominent but not overwhelming. The goal is to make the warning visible, not to bury the useful routing details under a wall of text.