This setting gives you the option to have your listings go to max price when they run out of stock. If you update your max price while out of stock by raising or lowering it, your listing will go to your new max. 

Once back in stock, your listing will revert to pricing according to strategy settings.

This option is disabled by default, but can be enabled on any competition-based strategy (i.e. all strategies except Sales Velocity Algorithm). If the listing is already out of stock and you enable this setting, the listing will go to max.