Changing the action of the function keys and keypad

4.4.3 Changing the action of the function keys and keypad

This option affects the function keys (F1 to F12) and the top row of the numeric keypad.

In the default mode, labelled ESC [n~, the function keys generate sequences like ESC [11~, ESC [12~ and so on. This matches the general behaviour of Digital's terminals.
In Linux mode, F6 to F12 behave just like the default mode, but F1 to F5 generate ESC [[A through to ESC [[E. This mimics the Linux virtual console.
In Xterm R6 mode, F5 to F12 behave like the default mode, but F1 to F4 generate ESC OP through to ESC OS, which are the sequences produced by the top row of the keypad on Digital's terminals.
In VT400 mode, all the function keys behave like the default mode, but the actual top row of the numeric keypad generates ESC OP through to ESC OS.
In VT100+ mode, the function keys generate ESC OP through to ESC O[
In SCO mode, the function keys F1 to F12 generate ESC [M through to ESC [X. Together with shift, they generate ESC [Y through to ESC [j. With control they generate ESC [k through to ESC [v, and with shift and control together they generate ESC [w through to ESC [{.

If you don't know what any of this means, you probably don't need to fiddle with it.