I believe the term used is "Instant Kill" and you're far from the only person asking. It's Karen who keeps suggesting the mode
An A.I. in the suit on the off chance that that's a spoiler
while Peter keeps refusing it. I think it's intended in part as a running gag, with him having to keep switching it back off, and in part, it's an indicating of a theme with Stark in the MCU, namely that
his ideas tend to get away from him as with Ultron and the suit itself, and despite his protestations that he's getting out of the deadly war weapons business, he's good at it, and his technology in the hands of others is problematic.
There is a second theory being floated, and that's that it's intentionally misleadingly named, that "Instant Kill" mode instead refers to the ability to shut down the suit. This seems less likely given the context in which it's cited, but it could be a safety feature due to Tony being uneasy with other people using his tech (the following being my hypothetical scenario, not actual material):
"Alright! Yeah, totally turn on the Fold, Spindle, and Mutilate function!"
armor falls off and proceeds to reduce itself to useless pieces
Stark voice from the remaining bit of tech: "Ah, ah, ah. Come back to the lab with a better attitude if you want to use the suit again."