This feature allows the user to auto-create a User in Joomla after doing SSO with the user credentials if the user is not already present in the Joomla User list.
This is the default behavior of the plugin, out of the box, you do not need to configure any setting to make this work.
You can turn this on to allow only existing users to SSO into your Joomla website.
You can do so by turning on (checking) the option “Auto register Users” in the Login/Logout Settings tab.