Hello Pradyumna
This simply means that you can run it from any PATH in the command prompt. If the checkbox is not checked, then you must be in the same folder as the python installation files.
For example, if you don’t check the box, then you must be in the following folder in the CLI in order to run python:
If you check the box, then you can run from any location in the CLI such as:
C:\Users\user
or even
C:\
I hope this has been helpful!
Laz