We report on the polarization switching as a new source of linewidth broadening and intensity noise in external grating diode laser setups that emit in a sequence of alternating wavelength intervals having TE, respectively TM polarization. At the borders between two consecutive intervals, the continuous random hopping of the system between the two polarizations, results in line broadening and in RIN values of -100 dB/Hz at frequencies below 100 MHz. In the middle part of each wavelength interval, linewidth of less than 300 KHz and low noise (< -145 dB/Hz) have been measured.