This setting works to compare changes to a WordPress core file on your system against the version on WordPress.org to determine if the change was malicious. Currently, this feature only works with WordPress core files and plugins.
The importance of file change detection for your WordPress site
If someone enters your site, they will likely add, delete, or change a file. IThemes Security File Change Detection allows you to know if any files have changed in your WordPress installation, so you can verify that the changes were actually made by you.
If changes have been made to your site files, you will receive an email. File change history is also available on the Logs page in the plug-in menu.
Advantages of online file comparison
Comparing file changes to the current core WordPress source files provides a more accurate detection of file changes. For example, if you upgrade to the WordPress source, you will no longer see file change notifications, so it prevents false notifications to a great extent. Now you will only be notified of file changes if your files are different from the WordPress source version at WordPress.org.