It's supposed to make the background image available to child elements of the element it's specified on for things like filter effects that blend content with the background. There may be other uses, but that's the one I know.
If you don't have it set, then technically the element can't use backgrounds created by ancestors.
The only major browser that supported it (ever) was IE10/11, so it doesn't get used very much. (It's also there as boilerplate in every Illustrator SVG export - for no good reason.)
(It's also been deprecated by all the major browsers since 2014)
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