I've never quite understood the point of this option:

But trying it out , I noticed the following (bug?):
If you make an overwrite or insert from source to program with program tracks DISABLED then:
1. the source material is edited into the program according to the SOURCE track enabling
2. the corresponding TARGET tracks are then enabled
BUT
3. the timeline reflects an edit as if the target tracks were honoured, Avid & FCP style - i.e. the insert/overwrite is not made on the program track
4. scrubbing / viewing the timeline updates the timeline GUI to reflect the correct status
Link to video showing it