Allow Workflow Schedules to Impersonate the System Account
What does the "Allow Workflow Schedules to Impersonate the System Account" setting do?
"Allow workflow schedules to impersonate the system account" allows workflow schedules to run using the System Account, which is normally prevented by SharePoint.
The last account that modified a schedule is the account that is used to run the schedule and will be used as the initiator of the workflow. However, if the schedule was created by, or was last modified by, someone logged in as the System Account the workflow will fail to run.