If false (default), derivations are not stored in Nix user environments. That is, the derivations of any build-time-only dependencies may be garbage-collected.

If true, when you add a Nix derivation to a user environment, the path of the derivation is stored in the user environment. Thus, the derivation will not be garbage-collected until the user environment generation is deleted (nix-env --delete-generations). To prevent build-time-only dependencies from being collected, you should also turn on keep-outputs.

The difference between this option and keep-derivations is that this one is “sticky”: it applies to any user environment created while this option was enabled, while keep-derivations only applies at the moment the garbage collector is run.