Settings are where one goes to configure various games options, and is accessible from the pause menu. Settings are globalized on a device, meaning that if another person logs on with the same device they will have the same settings as what the other player already set them to, as settings are device specific.
Some further details on settings can be found on the following threads:
On: The camera's Y-Axis will adjust itself follow that of the terrain, such as by panning up or down when climbing or descending slopes to attempt to give a better view.
Off: The camera's Y-Axis will not adjust itself when climbing or descending slopes.
Combat Camera Settings
On: The camera will pan around automatically during combat to give the best cinematic view.
Off: The camera will not pan around automatically during combat.
Default Camera Distance
Sets the distance the camera defaults to after it has been manually changed and after combat and after teleporting to another waypoint. The further the distance, the further the camera will default to from the character.
Added customization options for keyboard and controller: Go to Paimon Menu > Settings > Controls, select a function to change the key or button assigned to it, and press any key or button to assign it to this function.
New customization options added to Settings > Graphics: Volumetric Fog, Reflections, Bloom, Crowd Density, and Co-Op Teammate Effects.
New options added to Settings > Other: Combat Camera Settings and Default Camera Distance.