That setting controls how the scanner treats TGRP objects that you have programmed, but which are in "disabled" scan lists. It only affects behavior when you have a "wildcard" TGRP enabled.
While scanning, if you have a wildcard TGRP enabled, the wildcard won't generate "hits" for talkgroup IDs that you have programmed and locked-out. The "TGRP Ignore" setting extends this behavior to TGIDs that you have programmed, not necessarily locked out, but which are in scan lists that are not currently enabled.
Effectively, it tells the scanner: "treat any TGRP object that is in a disabled scan list as 'locked out'".