Much of this dialog was in place when Excel was second in spreadsheets to Lotus 1-2-3.  It was there to help Lotus users transition easily to Excel. (Hard to imagine the dominance that 1-2-3 had!)

If you are regularly saving your excel files as an older version, a web page, or similar, then you can select this as the default in the top drop-down. All file types under the 'Save as...' option are listed here.

The 'Excel menu key' setting (default /), is the key that when pressed gives you keyboard access to the Excel menus.

Transition navigation keys mirror the keys, when checked, that you would use to navigate in 1-2-3.

Lastly the two 'sheet' options allow worksheets to have 1-2-3 data with the formulas evaluating correctly without permanent change and the entry of formulas to be possible in the worksheet using the 1-2-3 syntax.

If strange things happen when you enter dates or formulae in your sheets, you likely have these last setting checked!