Hi @JaimeRamirezTSA,
As far as I know, that option basically creates a Canvas account using the information provided by your SSO if one doesn't already exist (see the info in the blue box on the How do I configure third-party authentication prov... - Instructure Community - 225 guide). If it's turned on for your instance now, I'd probably say to leave it that way until you are 100% sure that all your users would be created some other way (sis import, api, manually), otherwise you could end up breaking existing workflows and causing a lot of issues for your users.
-Chris
