This option allows the user to select between the old and new Internet protocols and addressing schemes (IPv4 and IPv6). The selected protocol will be used for most outgoing network connections (including connections to proxies); however, tunnels have their own configuration, for which see section 4.26.2.
The default setting is ‘Auto’, which means PuTTY will do something sensible and try to guess which protocol you wanted. (If you specify a literal Internet address, it will use whichever protocol that address implies. If you provide a hostname, it will see what kinds of address exist for that hostname; it will use IPv6 if there is an IPv6 address available, and fall back to IPv4 if not.)
If you need to force PuTTY to use a particular protocol, you can explicitly set this to ‘IPv4’ or ‘IPv6’.