Specify whether to clear the activation lock before wiping the device.

Activation lock will keep a device tied to a specific Apple ID. If not cleared, the device will be locked to the Apple ID that was signed in before wiping, which means you'll need to be able to sign in to the Apple ID before continuing setup. If the activation lock is cleared, the device and Apple ID will be unlinked.

In most cases, you'll want this to be true.