This option lets you import data from an LDIF file into the current directory. For this purpose, the LDIF Directory Import dialog is shown:
Normally this dialog immediately asks you to specify the path to the LDIF file you want to import into the directory.
Read all about LDIF imports and the options in the LDIF Directory Import dialog in the manual topic Importing Directory Data.
Another, faster way to open the import dialog: Open the context menu directly in the treeview panel (right mouse-click) and use the option Directory Import - LDIF: