(This item pertains to the check boxes on the General tab of the Setup Options dialog box. You can open it through the F5 key or through the Edit | Preferences | Setup menu option.)
When you use a while loop to measure features multiple times in your measurement routine, during the execution, the software creates multiple copies of those features. The Update theoretical values in while loops check box updates the theoretical values for the copied features, so that even if the CAD to part coordinate system changes during execution, the features' CAD values are modified so that they are in the original part coordinate frame used before execution.