Well it makes sense to think that selecting that will actually do something. I think it’s more to help you check and see if you actually like how it implemented? Sometimes things go a little wonky. If you don’t want your observations to automatically update, you can uncheck this feature in your settings. If you do this though, make sure you are updating your content manually to what you think it should be or else you might end up with inactive taxa but nothing to replace it.
Reading the fine print there I see that you would need to update changes from an ambiguous split, for example, so the button isn’t completely useless. You can read more about all the confusing details here: