This "Chart Conversion" option is used only when you are saving charts into a Solar type chart file.
The default zodiac that is selected in this drop-down list is applied whenever the chart data that is being imported does not have a zodiac stored with it, or has a zodiac that is not recognized in Solar Fire.
If the Force all converted charts to use this zodiac is checked, then all imported charts are given the default zodiac, regardless of what zodiac may be stored in the imported chart.