What it means is the the newest version of PSP will add the “standard” folders created when you installed the last 3 versions of PSP into the File location for 2020. It means that if you saved some supplies (downloaded or created), in those standard folders, PSP2020 will retrieve them (it will just point to those folders). If you have supplies for OLDER versions than the last 3, it won’t do it. If you have supplies in other locations (like I recommend), it won’t retrieve them.
Either way, it is really not a long or difficult process to adjust the File Location for the different supplies especially if you have them collected together somewhere else.
Although it is a nice feature, it is far from a make or break for choosing to upgrade to 2020.
And remember that you can choose the UPGRADE price, if you have any previous version of PSP and the installation will NOT touch those previous versions.