I always assumed Use normal map for static lighting for intended for mobile. But there’s a shockingly low amount of results when googling “Use normal map for static lighting”, but did find this on Answerhub.
"This option in the editor is not for just any normal maps in the game. It’s for specifically built types where lightmass would need to know how to address.
As a test case, if you have a cube with all faces using a single smoothing group, but then render out a normal map to achieve sharp faces. Lightmass will need to be told about the normal map to reconstruct that as a cube with sharp faces. This is where this option comes into play."
-Tim Hobson
So it seems like the feature is there for cases where the smoothing on the model does not look correct unless it has a normal map. With some workflows, that might actually be a common and large issue. But you can also avoid some of those problems by face weighting normals.
This is something I will be doing some testing with. Boxes with no normal map, baked normal map, weighted normal maps, weighted and baked, with “Use normal map for static lighting” turned off and on.