This policy setting sets the "Extend data range formats and formulas" option found under File tab | Options | Advanced | ...

This policy setting sets the "Extend data range formats and formulas" option found under File tab | Options | Advanced | Editing Options.If you enable or do not configure this policy setting, Excel will allow the user to automatically format new items added to the end of a list to match the format of the rest of the list. This is the default behavior.If you disable this policy setting, Excel will not automatically format new items added to the end of a list.