This setting will cause XFolder to create new objects at the lower left corner of the main context menu, i.e. where you pressed mouse button 2 to open the context menu, as opposed to the next available free position in the folder. This might take a little time of getting used to, but after this, it's quite handy.

This applies only to templates in the Configuration Folder. Dragging new objects from a template with the mouse will not be affected.