This Inventory option in Options Configuration works in conjuntion with the Seasonal field. Both fields affect what displays (or doesn't display) when you click Next Item in the Inventory Maintenance window (and optionally in the Point of Sale window).
Set the Seasonal Exclusion field to N if you want to display only items with the code you entered in the Seasonal field. Set the Seasonal Exclusion field to Y if you want to exclude items with the code you entered in the Seasonal field.
For example:
You want to display only the SKUs whose Seas Sales Code field in the Inventory Maintenance window is P.
Enter P at Seasonal and enter N in the Seasonal Exclusions field.