I recently came across, via the ID Facebook group, a good explanation of this on the German meinid forum where they have one or two posters who post in a personal capacity but work for VW. A rough summary is:
The HV tops up the 12V when low regardless of whether this setting is selected, unless the car is faulty. The car will not allow the 12V to run low. This has been the case since early software updates (possibly 2.0 I think)
However, as well as the 12V having a total capacity, it also has a programmed energy 'budget' for each ECU. So if one ECU is taking too much power when the car is off (eg if you have walked past the car and activated keyless entry lots of times) the budget for that ECU may run out and the software prevent it from working. However, if you have selected this option that ECU's budget will be reset and the HV battery used to top up the 12V accordingly, even if total 12V energy content is not low. The function can then continue to be used. If optimised battery use is disabled, and in previous software versions without the option, I understand budgets are reset when the ignition is switched on.
It seems a niche use case to me, but if some function in your app or keyless entry isn't working, it might be worth turning on.
The 80% limit referred to above is called Battery Care mode, that's a different thing.