This policy setting allows you to specify the file folder to save the licensing token used by shared computer activation.
Shared computer activation is used only for situations where multiple users share the same computer. For example, when using Remote Desktop Services (RDS).
By default, the licensing token used by shared computer activation is saved in the %localappdata%\Microsoft\Office\16.0\Licensing folder. But, this location isn't included in the user's roaming profile, so the licensing token won't be available if the user signs in to a different computer.
If you enable this policy setting, you need to specify a location to store the licensing token used by shared computer activation. You should specify a folder that is specific to the user and that will be available to the user from whatever computer on the network that the user signs in to. For example, a folder that's included in the user's roaming profile, or a shared folder on the network, where there is a folder for each user.
If you disable or don't configure this policy setting, Office uses the default folder to save the licensing token used by shared computer activation.
Note: This policy setting only applies to subscription plans that include Microsoft 365 Apps for enterprise, and to subscription versions of Project and Visio.