When you have custom fields defined for a scope (e.g. the product scope), those fields don't necessarily all apply to every product in your store. Products of a certain type may need certain fields while it's irrelevant to others To this end, ACF offers an "Applies to" setting in the field definition dialog:
Both sections and individual fields can have applies-to settings. If a section has an applies-to setting, this setting will be inherited by all the section's fields. Otherwise, each individual field can have an applies-to setting on its own.
The selection values in the dropdown depend on the scope, you are defining fields for.
You can select multiple values to filter the section or fields by. If an object fits at least one of the "Applies to" conditions, it will be shown in the editor.
A variation on field contexts is that you can edit fields for selected sections only. Using the dropdown option of the "Edit values" button, you can select which section to edit:
An "Edit by section" selection will still respect any "Applies to" conditions.