This option is for PIC32 MCUs only. It uses a MIPS32 M4K iFlowtrace™ mechanism, which is a non-intrusive hardware instruction trace. You can use this trace to capture every instruction executed by the device. The trace data is sent from the device using the pins TRCLK and TRD3:0 to the emulator. The emulator streams this data to a trace buffer on the PC that acts like a rolling FIFO.
Not all PIC32 devices have instruction trace so refer to your device data sheet.