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This option allows you to manage external user creation process. With changing switch positions user creation can be disabled or enabled:

Magic Collaboration Studio 2022x Refresh1 > Enabling external user creation > User_management.PNG

If you enable the Create external user on successful authentication option, an external user will be created upon successful authentication. This means that external users will be able to log in to Teamwork Cloud Admin even if no user existed before. An external user will be created upon such login.
If you disable this option, no external users will be created if the user tries to log in.

After an external user is created, it takes some time for it to show up in the User application list. This delay is caused by the properties caching.

Once you enable external user creation, you can also enable the Default user permissions template. With this option enabled, external users created upon successful authentication are added to the Default Template user group and given its permissions and assignments.