I don’t think it makes any real difference. It controls what happens when you go outside GSync frame rates (rare), where you probably want it on otherwise it tears.
The GSync ‘bible’ at Blurbusters says this:
However, with G-SYNC enabled, the “Vertical sync” option in the control panel no longer acts as V-SYNC, and actually dictates whether, one, the G-SYNC module compensates for frametime variances output by the system (which prevents tearing at all times. G-SYNC + V-SYNC “Off” disables this behavior; see G-SYNC 101: Range), and two, whether G-SYNC falls back on fixed refresh rate V-SYNC behavior; if V-SYNC is “ On,” G-SYNC will revert to V-SYNC behavior above its range, if V-SYNC is “Off,” G-SYNC will disable above its range, and tearing will begin display wide.
I’m not sure about this ‘compensates for frametime variances output by the system’ thing