This option will only be available when the document and profiles are in sync, i.e. both are RGB or both are CMYK. Selecting the Preserve RGB/CMYK Numbers checkbox will usually result in a quite awful looking display, so don't make the mistake of choosing that option. Basically, we are simulating how the document will appear if it's not converted to the actual device profile.
One use of this option is to enable you to see how the document would print if the appropriate media profile is not selected in the Print with Preview dialog. Normally, it's best the leave the checkbox unchecked.