The rule seems primarily to affect the children of naturalized US citizens who served in the armed forces and who did not live in the US for a period of time.
It does not affect people born in the US.
US citizenship can be acquired in a variety of ways, including those born in the country. Foreign born children can acquire citizenship either at birth or before the age of 18 through their US citizenship parents.
While the latest political guidelines do not make anyone ineligible for citizenship, it does seem to limit how children abroad can gain citizenship.  "The policy change states that we do not consider children living abroad with their parents resident in the United States, even if their parents are US government employees or US service members based outside the United States It is no longer assumed that these children have automatically acquired citizenship, "said a USCIS spokesman, referring to a section of the immigration law on residence.
"DOD has worked closely with our DHS / USCIS counterparts in recent policy changes and understands that the estimated impact of this particular change is low," said a Pentagon spokesman.
The updated policy directly affects US government employees and service members, many of whom are temporarily assigned to overseas posts for extended periods of time. The policy states that children who live abroad with a parent who is a US government employee or a US service member are not considered "resident of the United States" under part of immigration law for the purpose of acquiring citizenship.
Previously, their children were both living inside and outside the US, to eventually gain citizenship. By depriving the children of their citizenship, they can apply for citizenship only through a parent, whereas this would have been automatic if they meet certain requirements, said Cristobal Ramon, Senior Policy Analyst, Bipartisan Policy Center.
According to USCIS, the directive could affect children of legitimate permanent residents who were naturalized after the birth of a child.
The agency identified conflicts with the definition of "residence" in immigration law as well as conflicts with the leadership of the Ministry of Foreign Affairs as a reason for the change, according to the guidance.
Political guidance sparked confusion among military and diplomatic communities on Wednesday.
"Military personnel already have enough to do, and the last thing they should do if they are stationed overseas is to go through hoops to make sure their children are US citizens," said Andy Blevins. Executive Director of the Modern Military Association of America. "This absurd change by the Trump Pence administration is truly inappropriate, and we urge Congress to take action to ensure that our military families do not suffer the consequences of reckless administration."
A naval officer also told CNN that the leadership caused serious stress among the military's spouses. "You should go to a spouse's Facebook page and see the freaks," the official told CNN.
Immigration lawyers also considered the change.
"The fact that those of us who deal with immigration laws are reading this memo and immediately pointing to plausible scenarios, which leads me to believe that this will affect some people To influence a person is too much, "said Martin Lester, chairman of the American Assistance Lawyers Association's Bono Immigration Law Services Military Assistance Program for US service members.
The policy change will take effect on October 29th.