When checked (the default), the build form offers only the entries returned by the REST endpoint, and a submitted value must match one of them. The endpoint is contacted again when the build is submitted.

Uncheck it to let the user pick a value that is not among the entries: typing into the dropdown's search field offers the typed text as Use "<text>", and picking it submits the text verbatim. Any non-empty value is then accepted, and the endpoint is not contacted at submission.

This helps when builds must keep running while the endpoint is unavailable, and when a value the endpoint does not (yet) return should be passed by a trigger, the remote API or the build form.

This option only relaxes validation for non-empty values. Whether an empty submission is accepted remains controlled exclusively by the separate Allow Empty Value option: with validation disabled and "Allow Empty Value" unchecked, an empty value is still rejected.