Overrides server render distance. Some servers have pretty low render distance, and your game setting is getting overriden. For example, if server set render distance = 6 chunks, that means game doesn't render blocks 6*16=96 distance above or below you. If you select below option, you can see far above/below you (if you have decent Render Distance in-game setting).

Show unloaded chunks if they are in view distance. Makes your Minecraft client to respect your Render/Simulation Distance from game settings, and ignore settings set by server. Since these settings are set by server during login process, you need to relogin if you change Render/Simulation Distance.