This option modifies the format of the URL used to communicate with S3.
When this option is disabled URLs will be formatted https://bucketname.s3.amazonaws.com/key/path
When this option is enabled URLs will be formatted https://s3.amazonaws.com/bucketname/key/path
Typically, you would only ever enable this option when using an S3 compatible service (not AWS S3) that only supported path style URLs.
For Amazon S3 itself, path-style URLs are usually deprecated and may not work at all.