There are two different types of status checks, System and Instance, that each instance is monitored for and that report as metrics to CloudWatch.
- System status checks identify AWS infrastructure issues.
- Instance status checks identify things like startup, networking, memory, file system and kernel issues.
What this option really does is enable automation of instance migration to a new host when and if it ever fails its system status check. This feature only works with/applicable to the "StatusCheckFailed_System" CloudWatch metric.
It looks like this feature requires VPC EBS Backed instances in shared tenancy with a limited set of instance types, that seems to cover the main current gen options. It also looks like it is available in most regions.
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