A JAXB compatible implementation may support non-default operating modes. These modes must support all the XML Schema to Java bindings described in JAXB specification, but may also generate alternative/extension bindings for XML Schema constructs not required by this specification.
If you choose "Yes", the schema compiler is supposed to run in default operation mode, the tests for non-required features must be passed (as negative tests with expected error messages).
If you choose "No", the schema compiler is supposed to run in non-default operation mode, the tests for non-required features will not be run.
For more information on default operation mode requirements, see the "Compatibility" section of JAXB specification.