This setting tells FastCAM the maximum total length of connected entities it is allowed to look at to compress to one entity. It doesn’t always compress to this total length, it is just allowed to compress up this length. The larger this value the more entities FastCAM can collect and check to combine into one. This length should be relative to the part size and the mean entity length in the part. In general, a larger part with longer entities will benefit from a larger length limit. The number that FastCAM automatically generates is based on the overall part size which is a fairly good default value.
To learn more check this full guide on CAD Compress: