This policy specifies the path to a file (e.g. either stored locally or on a network location) that contains file type and ...

This policy specifies the path to a file (e.g. either stored locally or on a network location) that contains file type and protocol default application associations. This file can be created using the DISM tool. 

For example:
Dism.exe /Online /Export-DefaultAppAssociations:C:\AppAssoc.txt 

For more information, refer to the DISM documentation on TechNet.

If this group policy is enabled and the client machine is domain-joined, the file will be processed and default associations will be applied at logon time. 

If the group policy is not configured, disabled, or the client machine is not domain-joined, no default associations will be applied at logon time. 

If the policy is enabled, disabled, or not configured, users will still be able to override default file type and protocol associations.