If you enable that, you can block certain keys from working and you will be able to set a 'dead zone' in your screen, which will not respond to touch input until you turn off Interaction Control (once it's active, you turn it on and off by pressing/holding Home + Vol- ).
It helps if you need to grip your phone from, say, the bottom of the screen, but don't want to be constantly activating touch actions there, or if you press your palm on a certain section to help with typing or note taking but don't want the palm to be recognized as touch input.