That's odd since it took me less than 30 seconds to find this:
https://www.prepar3d.com/news/2016/12/113902/
Essentially, that setting is in there to set the default state to "healthy". This system is only used in P3D Pro and Pro Plus when connected to a DIS session and P3D's "weapons" are installed on the user's aircraft, something the general public will likely never have access to. NEntities will now report DAMAGED_DESTROYED when health points reach zero or when they are in a crash state when connected in a DIS session.
onetheless, the variable has to be set to at least "1" all the time since the core engine of P3D is common to all versions of P3D: Academic, Pro and Pro Plus
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