This thread covers a good use-case of this variable in Yocto.
But essentially this is your “version” of the image. Beside that it is used by mender-artifact-info.bb, this information is also embedded in to the .mender files, and would be parsed and displayed if this file is uploaded to an Mender server.
Currently we are using mender in standalone and it seems like this setting doesn’t have an effect. Is that assessment true?
In standalone mode this has very little (or none impact). In managed mode, the content of this variable would be reported to the Mender server for sanity checks (skip deployment if device is already running with image name X, etc)