What is the Closed Comment Format in Account Settings?

In our Account Settings, under Site Preferences, there's an option to change the "Default comment format" from expanded to closed. It doesn't seem to do anything for me. Is this a feature in the works?

If it has been implemented, what does this feature do? If it hasn't, how will it work? I think The Verge's comment system has a whole lot of room for improvement, so I'm really curious to know what the option is there for.