I learned a while ago that our sister campus has this option available in their instance, which is Instructure-hosted, while we do not. I think it's something that a Customer Success Manager or Implementation Manager can enable in scenarios where it makes sense.
From my understanding, some LMSes encourage users to upload or create HTML files for content. In Canvas, Pages generally provide that functionality in a slightly more controlled way. This flag would automatically convert those HTML files into Page content, making migrating to Canvas an easier experience for the teachers by setting things up in an optimal way from the start.
Hope this helps a bit!
-Chris