Don't use it. Do not set it to anything other than Production. I'm planning to get this setting removed from the files during one of the upcoming maintenance shifts.
I'm also in the process of writing a full commented version of the m2ee.yaml file, which contains the following section right now:
DTAPMode is an old setting that specifies in which DTAP (Development, Test, Acceptance, Production) step the application is running. The Mendix Runtime will behave differently when using Development/Test setting than in Acceptance/Production. In D/T, more 'development'-like extra magic functionality like automatically creating/updating an administrative account or trying to create a database when it does not exist is enabled.
Nowadays this DTAP stages are replaced by the 'Configurations' tab page in Project Settingsin the Modeler, which allows to create any number of sets of configuration settings to be used. (e.g. run on built-in database for development, switch to test-database of the project team etc...)
'Under water' the DT/AP difference in behaviour is still present.
NEVER EVER use Development or Test on a production server.
Also, NEVER EVER run the Modeler on a production database using e.g. an ssh tunnel to the database. Because the Modeler is always using development mode, it will instantaneously reset the password of the 'admin user' which is defined in the modeler to its development default (which likely means there will be a user MxAdmin with password set to '1' and/or create this account when it does not exist, which you DO NOT WANT TO HAPPEN.
I believe you cannot set this any more. In previous version you were able to set this from the modeller. But now they changed that so that you can only change it during deployment.
What the impact is of changing this parameter i do not know.