What does Unrestricted Web Access mean in iTunes Connect

It means that a user of the app can access any URL. The issue is parental controls. If the parent has restricted web access an app that allows unlimited access, that is access to any site the user chooses then the parental controls are subverted.

Once Apple provided parental controls that caused a ripple effect on the capabilities of apps and also required Apple to review all apps for parental control violations. It also means that alternate app stores could not be allowed, they could contain apps that did not properly honor parental controls. Hence:"The Walled Garden."

I think if you use default WebView control it is ok and you don't need to set Unrestricted web access to YES. My app has defaut WebView control with dynamic address bar and if i turn ON restrictions (limited websites access) embedded default WebView control does not display restricted content. It behaves the same as Safari app. So i would say you only need to set this to YES if your app has third party WebView control which can not be controlled by Apple.

TO CORRECT MY OWN ANSWER: sorry, but not true. If your app uses any kind of WebView (default or third party) with option to access any website you have to set Unrestricted Web Access to Yes otherwise your app will be Metadata Rejected. It just happend with my apps!

If you provide an internal web browser or UIWebView which allows to the user access to any URL you have to select YES or your app will be Metadata Rejected.