As per your answer i'm probably wrong but find below some explications.
I based my results on a simple test, upload a file using FTP Rush or Filezilla (same result with both).
When the checkbox is checked (server considere timestamp as GMT), if locally is 3:52:00 PM, the file time displayed in ftp client after upload is 3:52:00PM that represent the local time, not the GMT time.
If I uncheck the settings (server considere timestamp as locally), the time displayed is 11:52:00 PM that represent the GMT time we actually have here UTC -05:00 + Summer Time (+1 hour) = UTC -04:00.
I also compared my results with this website https://www.epochconverter.com/