I had described this a while ago on another forum:
It’s an additional measure for AI units against edge cases and “gamey / camping / grinding” players.
Let’s say you have you air patrol all set up, and enemy fighters sit just outside your patrol & investigation zones and take potshots with their long-range weapons against you patrol aircraft. A “clever” player may use this to grind down an enemy barrier with little risk.
With this option disabled, your aircraft will strictly stick to their patrol & investigation zones and will not step outside them for any reason. Sometimes you do want this behavior, either for your own forces (“Don’t step into the neutral zone / DMZ!”) or to model the SOP of some nation or other.
Other times though, you do want your guys, if they have suitable weapons, to reach outside and repay the potshots in kind (Or in a more general sense, be more relaxed about stepping out of their box and investigating unidentified contacts. This can be pretty handy e.g. for MPA aircraft in busy waterways). In that case you enable this option.
This can work pretty well in raising the risk for “sniper” attacks (“You’ll take my life, but I’ll take yours too”), but has to be used with care because it also opens the door to possible “draw & ambush” dangers.