What exactly does this do?
I had it unchecked and see all my filesystems on my desktop - non are top-level. I see none in the sidebar.
If I check the option nothing changes. I tried restarting Finder, nothing happened.
Does it require a reboot or remount of the pool?
I'm not really bothered about things appearing on the desktop, just curious. All the mounts do appear in their correct places otherwise.
My current desktop view (with the box unchecked, and that way since I booted) shows the following:
You can see the mountpoints set, and that they all appear on the desktop.