Page to update: https://docs.magnolia-cms.com/product-docs/Templating/Dialog-definition/Field-definition/List-of-fields/Link-field.html

The link field is used to select targets inside Magnolia (for example, an asset to render an image or a page to tease) where it stores a reference to the selected item.

In reality, a number of customers use the link field to select external targets too.

To use the link field for targets outside Magnolia as well, you have to set showOptions to false and textInputAllowed to true.