This parameter controls (assuming you have the correct FENCE_TYPE enables) how far from the home position your vehicle can go before breaching. Imagine a 30m (for example) radius around your home position (where you arm) that acts as a virtual “fence”.
Leave it disabled. Unless you have a very robust obstacle avoidance configuration, when RTL is triggered, it will make a beeline for the home waypoint, up to and including through your house and any tree, bush, fence, pond, or pool in between.