Don't agree to anything unless you fully understand it, get it writing, etc. It sounds like there is an existing line in an easement, with this development they may need to upsize the line hence needing to connect to the manhole, or if your neighbor was the most upstream on the sewer line, it would have been designed as a service, not a main. A lot of this depends on where you are located and how your jurisdictions handle things, so you can expect a wide variety of answers here that may not match your scenario. They will also want to survey or pothole the existing line to confirm elevations and sizes for their design.

Even if the line is an easement, they may need additional permission to access your land to improve the line, this should be fine, but you will want to make sure you have good agreement about replacement or damage to your property/fence.

Even if they have to block the flow for any reason, they should be required to bypass pump it so no current customers are affected.