Class A defines some interface with a collection of "Must Override" VIs.
Class B inherits from A, but is still an "abstract class" (LabVIEW doesn't have abstract class, but perhaps you're familiar with the idea. You can search online for more details - the idea is that basically they define some interface but don't implement any/all of it). Typically in LabVIEW this looks like a lot of empty block diagrams or just connected straight across wires (especially class wires, which you might want to connect across in case someone calls the parent implementation).
Class C inherits from B and implements the VIs.
If B doesn't mark the "transfer" checkbox, then it must produce overrides for all of A's DD VIs, even if it still won't implement them, and that will allow C to not implement them (because B does).
So marking the checkbox means: I don't want to be broken even though I don't implement these VIs. Make my children do the work!