Explain string "keep degree alterations"

"Transpose Diatonically" normally forces all notes to be in the key, whether they were originally in the key or not. That is, even if there accidentals in the original, there will be no accidentals once transposed. "Keep degree alterations" makes it so that if notes have accidentals before the transposition, they will continue to have accidentals after transposing.

So, key of C, a passage C D D# E, transpose diatonically up a third, turns into E F F G if you *don't* check "Keep degree alterations", or E F F# G if you do.