Use enclosing folder's privileges means that privileges are inherited. If the inherited flag is off, then a folder's privileges are stored explicitly for that folder. The whole access privileges are made up of nine flags, in a matrix of owner, group, everyone and read, write, change. So inherited privileges are more efficient. Probably the best way to improve start up time is to compact the access privileges.
Inherited privileges simplify server admin and user access.
For example, if a user drags a folder from within their own private folder into another user's drop box, the folder being moved should be set to have inherited privileges. Otherwise, neither the sender or the recipient will be able to open it. It's best to use inherited privileges where possible. Obviously, there are reasons why you want a particular inner folder to have different privileges to its enclosing folder, which can only be done through explicit privileges. But for a folder which has exactly the same privileges as its enclosing folder, it's best to use inherited privileges.