ARR does not set this value automatically. However, it is the recommended setting for deploying ARR in production.
Functionally speaking, this value has no impact on how ARR works. The idle time-out is designed to bring down the worker process in order to free up more memory. (The default value is 20 min. So for example, if you have multiple sites/applications in multiple applications pools, and if there has been no activity on one of them, IIS will bring down the worker process - so that other processes/etc can consume the resource on the machine.)
Since ARR is proxying the all requests to the content/application servers behind it, we recommend that the worker process is running all the time. (That said, if there is a constant flow traffic, then the worker process would be running all the time, irrespective of this value. ie. It won't be idle for 20 min.)
Won