These settings would be of no use added anywhere but on a post. They will not have any effect if added to a user or another taxonomy because WP does not natively support taxonomies for taxonomies or users. They also will not do anything if added to an “Attachement” post type because WP does not natively support taxonomies for attachments.
When used on a post page, if these are not selected then ACF does not connect these in WP. So WP will not know that a post has a term. When these are set to yes then ACF uses wp_get_object_terms() and wp_set_object_terms() to load and save the values of the field.
This feature can be turned because, well, it does not work if you have several taxonomy fields for the same taxonomy on the same post. If you have more than one field for the same taxonomy then they will overwrite each other and whichever field is saved last are the terms that will be assigned to the post.
If you have some system that allows taxonomies for something that is not natively supported by WP, of if you want to have multiple fields taxonomy fields for the same taxonomy they these need to be turned off and you need to create your own actions when the post is saved that will create these relationships.
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