When printing with multiple extruders, the extruders that aren't currently printing will be held on stand-by. The material must be retracted out of the heat zone completely while they are on stand-by, because they will get a lot of time to ooze otherwise.
This setting determines how far the material for this extruder is retracted when the extruder goes into stand-by during an extruder switch.
This setting can be configured separately from the regular retraction distance. Generally, the retraction distance for stand-by extruder is much greater. This is to ensure that the material doesn't keep oozing in the nozzle chamber while the other extruder is printing.