This options is located under Application Button>Options>Operations>Comparison.
This setting affects the generation of a point object from a polygon object for comparison. When Use Vertices Only is checked, Qualify only uses the points where the triangles come together to generate a point object. If it is unchecked, you can designate a Max Count point cover to be placed over the polygon model to create more points for comparison.
In version 11, this option is located under Tools>Options>Operations>Comparison.