Fields
The tag can be controlled by Fields. To do so, enable the Use Fields option in the Basic Properties menu.
The field list can contain various item-dependent fields. Imagine, for example, a spherical field that has an explicit position. If the tag-bearing object is deformed by a deformer/effector or a simulation, for example, the positions of the object points/clones etc. change. Should the spherical field now act on the deformed or undeformed element state? You specify this with this option.
If, for example, a character animated by joints (or the elements of a matrix controlled by an effector) is to move through the sphere field and the sphere field is to take effect at the moment it passes through, the option must be activated.
In general, it can be said that the option decides whether the tag is evaluated before (option deactivated) or after any deformers. This entails certain restrictions: tags acting on deformers may then no longer work. Imagine a Restrict tag on a deformer; this uses, for example, a vertex map to define the deformer effect at point level. To do this, the tag must be executed BEFORE (option deactivated) the deformer. The restriction does not work if this option is activated.
See for example Field.