Hi Sam,
Basically
the purpose is to speed up server startup. Is oriented to development (as the name says sometimes the developers only want to test and the server startup is to long for them.
publib.boulder.ibm.com/infocenter/wasinf...Run in development mode
Enabling this option might reduce application server start-up time because it changes some of the JVM settings, such as disabling bytecode verification, and reducing just-in-time (JIT) compiler compilation costs. Do not enable this setting on production servers. This setting is only available on an application server that is running in a Version 6.0 or later cell.
Hope this helps,
regards,