This is a testing option to stops phase resets from occurring. For example, at Shiloh on day 2 all units would remain where they were at the end of day 1 rather than getting reset to new lines. Seems great, just what everyone has always wanted, but there is a catch. If the map resizes on the phase change and your units are outside the new map you lose access to them for the battle. If a unit's day 1 position is at the same spot as the spawn point of a day 2 unit then they will start the phase in melee. At Chancellorsville, Jackson's corps is already on the field and without the reset there is no flanking attack, etc.
There are a few battles where we think it might be safe enough to enable this option, but overall it mostly just adds more memorization for the player to avoid frustration and opportunities to abuse the spawn locations. A good example would be Potomac fort where you could setup most of your units in a perfect defensive position prior to the second phase before capturing the fort.