Other
As the name suggests, this is how many already loaded projects is the plugin allowed to cache in memory. You should really set this to at least the number of projects found in all the opened multi-project builds, otherwise you might experience unwanted project reloads in the background.
If you select this option, every time you save a file, the project owning that file is recompiled in the background. The recompiling is done by executing the task asssociated with the "Apply Code Changes" command (which is "classes" by default). Also, if you have a debugging session open, an attempt will be made to reload the classes in the debugee.
If a Jar task of an opened project produces a jar file with the same name as resolved dependency (e.g., pulled from a Maven repository), the dependency will be replaced with a project dependency. The logic of determining from which source sets this Jar task is created from is the same as with a normal project dependencies. Note, that this dependency replacement is only for editing purposes. For example: Jumping to a type found in the jar file will jump to the sources of the associated opened project. However, when building the project there won't be any such replacement made and the appropriate Gradle tasks will simply be executed.