It is something that was always 'part' of GroovyMAME and was recently added to baseline MAME by Calamity.
And since Groovy is based on the official MAME the option in return just appears in it too now.
Baseline MAME (as well as every other variant besides Groovy) was always 1 frame laggier because of the way it polled inputs, Groovy fixed that since back in 2012 or something, and that reached MAME only now.
Standalone, it is more like a fix for a longstanding baseline MAME flaw than a low latency feature.
Because it won't work with a handful of games they had to add the option so people can turn it on/off, but mamedev named it a boastful 'low latency' which it deserves only if you're in the case of using a FreeSync/G-Sync setup, in which case it will equal Groovy.
The naming was bound to confuse people, and sure it did as you can witness everywhere on the internet since then, people made a big deal of it because they did not understand that it wasn't as huge as the name hints if you don't own VRR.
Even more confused when if you tell them it was ported from Groovy but that it does not provide the same lag reduction.
With few game exceptions then (mostly 3D ones iirc) just leave it on, it is part of Groovy's architecture.
Also, I like the look of crt-geom-deluxe...what's the best video option for that shader in terms of input lag, bgfx or opengl?
Note that Groovy's features don't work with BGFX (or opengl)
right now, because it still adds unwanted lag which is a problem.
Groovy is meant to work with D3D9ex
only, which is does by default.
leave 'video' on 'auto'
If you change that then kiss Groovy's features goodbye.
You can still use HLSL if a CRT look is what you want.
EDIT: in fact Groovy is not like other MAME builds, you cannot change whatever you want without knowing in advance if you should or shouldn't, or you risk breaking its functions.
You cannot deviate from the guide:
http://geedorah.com/eiusdemmodi/forum/viewtopic.php?id=433(
@Recapnation IMO the guide should really specify 'don't change the video API period')
Like many aspects this is why the build is not very popular, you can achieve the greatest MAME experience with it, but it requires discipline, time, and proper hardware.
This is why I really insist people should seriously consider FreeSync/Gsync route instead, unless they like blood and tears.