With this option enabled Moodle will try to automatically discover a feed on a web page if is not given a direct link to a feed.
For example, when entering the Moodle Docs URL:
http://docs.moodle.orgMoodle would automatically discover the recent changes feed to subscribe to:
http://docs.moodle.org/en/index.php?title=Special:RecentChanges&feed=rss