PSBT means "Partially Signed Bitcoin Transaction"
I think PSBT is enabled by default on watch-only wallets.
Check the image below for how to create an unsigned PSBT.

Just in case you are using an old version and you can't find this feature, I suggest try enabling it in the options>wallet check image below.

But I believe for the latest Bitcoin Core, this manual PSBT control is enabled by default, so you can't find it under that tab if you're trying to look for that.
In your offline device Once you create an unsigned PSBT from an online device, transfer it to an offline device and load the PSBT to sign it. You should be able to find "Load PSBT from file..." under the menu and then file.
Image below for reference.

Im just trying to figure out what does this option do exactly.
It is for creating offline transaction and like I said it is enabled by default on latest version.