I'm going to assume you understand what a bleed is and how they work. (if not)
Your understanding is essentially correct.
I have to wonder if leaving it off will crop that bleed.
Based upon your included image... Yes, it would. But it doesn't have to.
The difference is...
Unticked ) use the measurement fields below (
0mm in your image)
Ticked ) use the bleed measurement fields in
File > Document Setup
Essentially it's just a shortcut to alter the bleed amounts.
If you create a document and do not enter bleed amounts when creating the document or set the wrong bleed amounts.... you can untick the box and add bleed amounts using the 4 measurement fields below the box.
You'll find that ticking the box will auto-fill those four measurement fields below the box with whatever bleed amounts are specified in
File > Document Setup.
These are older screenshot of the dialog windows.. but the gist is the same....
There really aren't any "pros or cons" either way. It's merely what fits your workflow.
For example, I tend to configure all AI documents with a 1p6 pica (18pt) bleed when I create the file. So my Document Setups all have 18pts for bleed measurements. When I output to PDF for commercial printing I need to include the bleed. All I have to do is ensure
Use Document Bleed Settings is ticked and it will include my 18pt bleed as reflected in the read-only measurement fields.
Then, I need to output the same file to a PDF for email/web distribution. I do not want bleeds in this email PDF. All I have to do is untick the
Use Document Bleed Settings and the measurement fields below will be used for the bleed. When the measurements are set to 0, there will be no bleed.
Here you can see that ticking the box, includes the bleed I need for press, and unticking the box removes the bleed for email distribution (because the values are set to 0).
Just a note... none of the measurements alter actual artwork in the file itself. Measurements control the offset space for a bleed, they do not "generate" any artwork in that offset space. Artwork which needs to be present in the bleed area must actually exist in the file itself before output for bleeds to be correct.