Whenever possible we recommend that each developer has a private workspace. This ensures that you can work in isolation from other developers. You choose when to submit your changes which might impact other developers. You choose when to update your workspace, getting changes which might impact you.
There are occassions where this is not possible. For example, when working on a website it might be impractical for each developer to have their own version of the website. In such situations you can enable this option so multiple developers can work on the same workspace.
Each developer will create a workspace to the same location and enable this option. When a developer checks out a file in the workspace, the file will be locked so other users cannot check it out.