If you check "limit blockchain storage to...", you will run a pruned node which means that you won't store the entire blockchain in your hard drive.
A pruned node keeps the latest blocks and removes the old blocks over time.

It may worth mentioning that you will still have to download the entire blockchain even if you run a pruned node.
Also note that in the case you run a pruned node, you will have to redownload the blockchain, whenever you want to import a new wallet.dat file and you need to reindex or rescan the blockchain.