It allows the screen to scroll beyond the edge of the layout.
For example if you have the camera following a player using "scroll to," when they approached the edge of the layout the scrolling stops, hiding the off layout areas. "Unbounded scrolling" allows the scroll to follow the player to the edge.
In some screen modes like "Scale Outer" a game size smaller than the screen won't be allowed to move from the top left of the screen, because it would show beyond the edge of the layout. Turning on "Unbounded scrolling" allows it to center on the screen.