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This setting allows you to choose between 2-span and 3-span as the assumption regarding continuous stud support for sheathing in out-of-plane design for C&C wind loads.
The out-of-plane sheathing capacities in SDPWS Table 3.2.1 are based on continuous panels spanning just 2 wall studs. According to SDPWS C3.2.1, this is because such narrow panels frequently exist at building end zones where wind forces are highest.
Sheathing capacities in other publications such as the Wood Frame Construction Manual are based on 3 spans, and Note 5 to SDPWS Table 3.2.1 indicates you can increase this it to 3 or more spans based on the characteristics of your building. When 3-span is selected, the tabulated values are multiplied by 1.25.
The span assumption appears in the legend below the Components and Cladding by Shear Line table in the Design Results output.