It means BOTH
"Thank you for reminding me / pointing that
out for me" and "I remembered / I saw it".
Appropriately used when someone tells you something under the assumption that
you do not remember or are not observing what
they are telling
you, and you wish to thank them AND let them know their remark was unnecessary. This word
is polite, and using
it implies that
although you did not need the suggestion or reminder, you still wish to express gratitude.
Similar to, but more polite than, "Thanks, but no thanks."