It turns off the ask, so the way it works is you need to ask and then you need to wait for a response and if that response is "Yes" they can then begin tracking. In any other case/situation you are not able to.
So if you don't want this asking you everytime you open any app (based on my experience it happens frequently) you can turn it off.
It would ask once per app, per install. This global setting just auto denies it for every that asks, and I'm pretty sure ( but haven't tested ) retroactively denies any app you had previously said yes to.
Source: I'm a newly role changed iOS developer at my job.
So if you don't want this asking you everytime you open any app (based on my experience it happens frequently) you can turn it off.
But yes, it could use a better wording.