This policy turns on the check-out to local disk feature. If you enable this policy setting, documents that are checked-out ...

This policy turns on the check-out to local disk feature.

If you enable this policy setting, documents that are checked-out will be stored in the Local Drafts folder on the local disk.

If you disable or do not configure this policy setting, documents that are checked out will be checked-out on SharePoint and no local copy will be created.