The CAD Nominal button provides a toggle to choose between nominal selection options when a feature is built. This selection then directly influences the operation of the feature buttons when a new feature is defined:
Build without Nominal. This setting is to be used without CAD and builds a basic fit only feature without pre-assigning a nominal feature.
Extract Nominal from CAD. With this option selected you will be prompted to select the nominal feature by clicking on the desired surface face. The newly built nominal feature will be assigned to the new feature.
Save CAD Faces with Nominal. It can be helpful to save the selected CAD faces when building nominal features from CAD. When you do so, these faces will highlight along with the highlighted relationship and they can then be used during auto filter operations.
The From CAD option provides a means to construct features of any type directly from CAD by selecting a CAD face and operates independently from these settings.