If you use pre-luclin Player Character textures, mounts will be invisible on others and you won't be able to use mounts. If you turn on this option, you'll see the mount but your character will be like standing on the mount, since pre-luclin models don't have "ridding" animation. TL;DR Turning on this option will allow you to ride a mount while using old models.
Sept 2016 update Added an option to the display tab of the options window that allows you to see pre-Luclin PC characters on mounts. The ability to summon and ride mounts is no longer disabled on pre-Luclin PC character models.