In very short form: "unfolding" is the translation of calc engine constructs into relational constructs. The idea here is, that if the complete hierarchy of calculation views can be "translated" into relational constructs, then the whole query plus the view definition can be processed by the relational query transformation and optimisation stack (which is what happens to "normal" SQL statements).
As some of the calc engine constructs cannot be translated into relational operations, the "unfolding" may only be partial. That's when you see a "CALC VIEW" in the EXPLAIN PLAN of a query.
The hint you mentioned is there to prevent the unfolding, as in some situations it might be better to not go with a partially unfolded view hierarchy. This of course has to be checked and analysed for each case individually and should be considered the rare exception that mostly applies when dealing with rather old HANA information models.
Basically, whenever you build new views nowadays, this hint should not be required and the views should gain best performance with complete unfolding.
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