You can use this to isolate your applications even further. For example when this option is set to False ( the profile is not loaded ) your application will use the c:\windows\temp folder as its temporary directory. If you have other application pools even they will use the same c:\windows\temp folder. If you set the option to load the user profile the temporary directory will be now change to use the profile’s temporary folder C:\Users\apppooluserid\AppData\Local\Temp.
If the profile is loaded you also have access to all the custom environment variables for that user.
Here’s a question what do you think will the temporary folder be when the Application Pool identity is set to Network Service and Load User Profile is set to True ?
It is not C:\Users\NetworkService\AppData\Local\Temp. but C:\Windows\ServiceProfiles\NetworkService\AppData\Local\Temp