It is used to generate a type=identify section. which is used to determine the endpoint, from the IP address. The “permit” part of the name is misleading, and I can’t think of a case where it is valid.
If you don’t set it, FreePBX sets it to be the same as the Server setting.
In this case, it is probably causing the extension to match against one of the trunks, as the FreePBX default is to prefer IP matches over user name matches.