If I'm not mistaken this changes the 'center offset' of the HMD sight.
If you bring that sight down to mark targets visually, it is by default not put in the center of your vision, but a bit above. The advantage is that you can mark a target looking out the window and at the same time look at the Shkval screen for example, for a quick ID.
Pending your display settings, exact way of handling these things etc, a different displacement might be better. For example, if you zoom in a bit, the HMD reticle might be outside of your field of view quickly and you'd want a smaller displacement. If you find yourself having to go back and forth between designating and looking down at the panel, you might want a higher value.