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

The User management is enabled, on successful authentication external user will be created. This means, that even if there are no users imported from configured LDAP, users from configured LDAP will be able to log in to TWCloud Admin. With this login an external user will be created.
The User management is disabled, no external users will be created if the user tries to log in from configured LDAP.

After external user was created, it will appear after some time in the User application list. This delay is caused by the properties caching.