The purpose of this setting is limit the amount of memory any single query can take. This setting is extremely useful when you want to limit the amount of memory consumption per query for queries across the board. Before this setting, it was possible to have an extremely poorly written query eat up all of a server’s memory and bring all other queries down to a halt. You can see an example of a such a query and SSAS memory settings in my previous post here.
Read on for details about what it does and what happens when a query reaches the memory limit.