For further information on this setting see MAN-06 Test Management Section 3.4 here. 

You may still be in compliance if this setting is disabled. The purpose of this setting is to enforce that all automated tests are associated with a predefined test case. As a result, automated test associated with software item specs or other items are not considered part of the test plan and testing report. Ultimately, it is up to the decision of the organization whether or not to require automated tests to be associated with test cases, as long as the test plan comprehensively covers design inputs and design outputs.