This instructs the reporting system to run a report across workspaces. What happens is that the output from each workspace is combined.
From report script you use the RUNACROSSWS setting.
From the report builder you have additional UI elements if the encyclopedia is workspace-enabled in the Add/Edit Report dialog:
The button leads to a workspace selector dialog where you can tick the workspaces the report is to be run against. If no workspaces are ticked, the report runs against all workspaces.
The final parameter restricts output for each workspace to those records that were stored in that workspace. This means creations and modifications made in this workspace, so excludes anything that was inherited from parent workspaces that was not changed.
The values returned by the WorkspaceName and WorkspacePath fields are those of the workspace being reported on, when a report is run across workspaces, in order to understand records that might otherwise appear to be duplicates.