Even with an unchanging object moving about in frame, the way that object is rendered in pixels changes its shape in the file ever so slightly, Add camera noise to that and no two frames of the exact same moving object are going to be the same. So that’s one use, to set a tolerance for an object that won’t be quite the same on the next frame. So when AE goes looking in the next frame for that thing, it says, we’ll that thing there is within a 20% or 80% tolerance of the previous frame so that’s probably what I should lock on to.
On the other end of the scale, you might have an object that is rotating or the camera is rotating around an object, (or worse, changing size) and that object may not be the same shape or color on all of its “sides”.
So in effect you are telling AE ,with that setting, to match that object either more perfectly or less perfectly so that there is some forgiveness in looking for that “exact” shape, because it will NEVER be exactly the same from frame to frame.