Choose this option if you would like your current case to reference the new file locations after the file copy. You may or may not wish to update the case database with the new paths depending on the reason for file relocation.
If you are exporting files for use on another machine not on a network, then you will not wish to update the database with new paths.
If you are relocating files on the same machine or to a different part of the network, then you will want to update the paths.