If the setting is activated, upon dragging files into AE a rename files dialogue box would appear, asking whether the user wants to rename the file(s) within AE or keep the original file name. The user has the option to specify the prefix for each file type within the settings for this option.

For example, I import 5 images and have used "img" as the prefix, then the images will be renamed within AE to:

img1, img2, img3, img4, img5