Switches between window and crossing modes when you select by region (by drawing an invisible shape as a boundary to select objects). The button's icon shows which mode is active.
In crossing mode (the default), objects that are within the region boundary or that are crossed by it are selected.
In window mode, only those objects that are entirely within the region boundary are selected.
The Select Region Rectangle, Circle, Fence flyout on the toolbar allows you to create boundaries of various shapes.
This setting is saved in the 3dsmax.ini file.