This policy setting governs the default format for new presentation files that users create. If you enable this policy setting, ...

This policy setting governs the default format for new presentation files that users create.      If you enable this policy setting, when a user creates a new blank presentation, it is in the specified default format.  Users may still override the default and specify a specific format when they create a presentation.If you disable or do not configure this policy setting, PowerPoint Presentation is the default option.