FOV Type is related to how the specific game expresses FOV. If you change it, the value in the FOV box should follow and be converted to the new type you select. Rounding might affect this in a minor way though.
Apart from that, changing the type is useful for converting between different types. You can match the FOV Type and FOV value of another game, and the output will tell you what FOV you should configure to get this exact FOV.