If this option is enabled matching will only occur for a grouping (usually a folder) if all files within the grouping can be matched to a single album, this should usually be enabled to prevent albums being split up.
If our songs are already organized one folder per album then songs in the folder will only be matched to a release if all songs in that folder can be matched to the same release. Usually Jaikoz is clever enough to recognize when you have a multi disc release and have created separate folders per disc as well, in this case it will only allow a match if songs in each sub-folder are matched to a disc of the same release.