Image as Link option allows you to change your image into a link. It can open the Image Page or a custom URL as specified in the settings (it is possible to use metadata in order to set up unique URLs for different images). The link will always open in a new tab. Keep in mind that switching these options on will disable Hyper Zoom or Full Screen on click if used.
This feature can be used for example for thumbnail images or in a product gallery where images are linked to specific product pages.