The option “Update application files working with Disk” is needed to configure how applications will be updated. Either it will be all networks (mobile network and Wi-Fi), or only Wi-Fi.
I recommend always choosing the second option in order to save traffic. After all, automatic updating of 10-15 applications from the Play Store can quickly use up your Internet package on a tariff plan.
To select networks, go to Settings> Google> Data management. And choose the option you want.
