The avahi-daemon documentation is very vague. What is the role of the service, what will be the impact if it is disabled, and will it affect Internet access?
Avahi is responsible for the announcement of local services and devices such as network printers, smart TVs, ...
Usually avahi-daemon it is not installed on OpenWrt by default as it is rather large and intended for desktop machines with lots of resources. There is a OpenWrt-specific service called
umdns which does the same thing and can be installed if needed.
However, most likely avahi found its way into your device because you installed software which requires it for some reason. I see only three packages which may potentially use it:
Neither OpenSSH nor nut depend on avahi for basic functionality.
ksmbd user experience may suffer without avahi running because storage volumes shared using ksmbd will no longer appear in "Network Neighborhood", you will have to connect to shares manually.