It's an option you can use if you are unable to match FOV. What it does is calculate the correct resolution for the FOV you have to be a perfect match to what you are converting from. So you basically shrink or extend the image so what you see on screen is perfectly matching the FOV.
Say you are converting from 100 FOV to 90 FOV. The focal length then calculates what resolution you need to set to make the 90 FOV match what a 90 FOV cutout is of the 100 FOV. So you will get black bars around the 90 FOV resolution, but what you see is optically the same.
This method does require some knowledge on how to force your graphics driver etc into the correct resolution. And it does not work for all games.