It's unclear whether this is a shift in policy or phrasing, but Whitten says that while ditching Kinect may limit the console's capabilities, the sensor isn't a necessary piece of equipment at all times. Instead, you'll only need it for voice- and motion-based navigation features, or to play games like Fantasia: Music Evolved, which rely on the sensor.
"Games use Kinect in a variety of amazing ways, from adding voice to control your squad mates, to adding lean and other simple controls beyond the controller, to full immersive gameplay," he says. "That said, like online, the console will still function if Kinect isn't plugged in, although you won't be able to use any feature or experience that explicitly uses the sensor."
Clean out some extra space on the entertainment center or in the closet: it depends on what you play.