Because in some cases, like in the Special Rule for Divorced and Separated Parents, both parties would include the child for different tax benefits.
And the biggest reason is the TurboTax does not know if the other child has been claimed or not - only the IRS knows this.
Special Rule for Divorced and Separated Parents
The IRS looks at who the custodial parent is and who is not. The custodial parent is who the child lives with for more time during the tax year.
When you allow a non-custodial parent to claim a child, you are only releasing the ability to claim the child for Child Tax Credit under the special rule for divorced and separated parents.
The custodial parent retains tax benefits related to Head of Household filing status, Earned Income Credit, and the Child and Dependent Care Credit. To be eligible for these credits, the child must have lived with you for more than half the year, so the non-custodial parent is not eligible for those credits.
This article will give you more information: Divorced and Separated Parents
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