>>49860356
Early game for your first run can be hard because eventually you become undergeared for the stuff you're attempting. Because of that if you want a much smoother time where you don't have to worry about equipment as much, you should consider turning this option on.
What that option does is make your typical equipment-based stats based entirely off your character's level instead (except for guns), making it so that you don't need to worry about equipment. This makes weapons more for type (pierce, slash, etc. and sword, blade, etc.) and equipment more about slapping on stuff to get optimal resistances (unless you're a Persona User) and/or equipment set bonuses. In fact, the most optimal defensive equipment people use tend to focus more on resistances than the actual defensive stats of the equipment, so using that option can end up making your human characters stronger than they probably would be in a typical gameplay, because often getting the optimal resistances across the board will end up with your characters wearing even level 1 gear depending on what you're going for.