In U4 the CRM engine has been redesigned, and now adding CRM contacts to 3CX contacts is not mandatory. The contact details can be passed directly from the CRM engine to the 3CX client, without storing the details in the 3CX phonebook. This setting that you highlighted allows keeping the same functionality you had in U3, for those users that prefer keeping contacts in the 3CX phonebook, for easier lookup, calling, etc.
In addition to this, now the CRM engine will log some calls that previously were not being logged, for example missed queue calls.