With this setting, you are able to override the default level of access to items on lists as follows:
Project Admins: Full Access
Internal users: Limited Access
Project Admins: Full Access or Limited Access
Internal users: Full Access or Limited Access
For more information on what the different levels of access mean, see Customise user permissions on each list (Enterprise plans only).
1. Go to the Settings screen
2. Go to Default list access under the Lists heading. You will find options for Project admins and Internal users. Click on the current permission to the right-hand side and select the new desired option from the Item access pop up.
3. Your changes will automatically be saved and will take effect on any existing & new lists that use the default permissions and any new list