The networked entity tree will be removed when the peer owning it leaves/disconnects.
The networked entity tree will survive the departure/disconnection of its owning peer and stay in the game for the duration of the network session. When its owning peer leaves,the server becomes the entity's new owner. Be careful when using this option as this potentially means accreting spawned entities over time and having the server manage a whole lot of them. If you use this option, you probably want to implement gameplay logic to remove these entities over time.
When an entity tree is added as networked to the game, determine its removal policy when the peer owning it disconnects. This option is is meaningless if the entity tree is not networked (if it's local, only the owner peer knows about them, so when it disconnects, they're gone with it).