Setting the policy to Enabled keeps the on-screen virtual keyboard (a Chrome OS input device) on. Setting the policy to Disabled keeps this keyboard off.
If you set the policy, users can't change it. (They can turn an accessibility on-screen keyboard that takes precedence over the virtual keyboard on or off. See the VirtualKeyboardEnabled policy.)
If not set, the keyboard is off, but users can change it.
Note: Heuristic rules might also factor into keyboard display.