List detection is used to control the reconstruction of document wide heirarchical numbered or bullet lists.
This option applies when converting to Word and PowerPoint.
If you choose to detect lists, then they will appear in the converted document as lists, and can be edited in that way.
This means that if you add or remove items from the list, then the document will automatically change the numbers of other items in the list.
If you choose to not detect lists, then the text will still appear in the converted document but it will be text, and not part of a list.
If you edit the reconstructed document then automatic re-numbering will not occur.