View Section - "Use Optimized Clips" Explanation?

I was working in premiere rush on Windows 10 computer and I was trying to figure out how the "use optimized clips" selection in view menu actually works.  Through my research on-line I couldn't get a clear answer.  If I import my files from a desktop to rush on that same desktop it seems rush automatically starts "generating optimized clips" even if I am not connected to the internet.  Why is it doing this?  I do not have "use optimized clips" selected.  Does it just automatically do this always as a default?  It is taking a very long time (I imported around 25 gb worth of footage).  I wish it would stop so I could just edit, editing while it is doing this is hard because the CPU is running overtime.  It works but it is slow and not easy to work with.  On a separate but related note, if I clip on the "use optimized clips" button on my desktop is the idea that once all the "generating optimized clips" is done that I could then edit using this optimized clips and it will be less cumbersome on my computer while editing?

Last question, where do these optimized clips actually go?  Are they taking up extra space on my hard drive?  Is there any benefit to editing with "use optimized clips" off or is it always better to edit with "use optimized clips" on so that you can work faster?  Is there any down side?  Thank you so much for your help and info, sorry about so many questions in one post, I just couldn't find any good answers to this and I wanted to learn how this is working on my computer etc.