This article covers a detailed behavior of the above feature in salesforce.
This setting addresses some legacy use cases in Salesforce.
In the scenarios where you want to send a checkout link and the end customer has the ability to update the quantities/discounts to some extent via the hosted checkout pages, this setting would come to use. When you do this, there would be a discrepancy between what you quoted on the opportunity and what the end customer actually purchased. Turning this setting off allows you to leave the opportunity products intact (as it was originally quoted) without having the subscription items from Chargebee change anything on the opportunity. Enable this if you want to override the products added in the Opportunity with those in Chargebee's subscription.
When you want to use the Create Subscription action directly from the opportunity, this setting can be used. This action would not add products immediately to the opportunity when the action is complete, but when the end customer completes the purchase/checkout, the subscription created in Chargebee will add appropriate products and discount to the opportunity and close it as part of an automated sequence of events (if this toggle along with the other settings is turned on).