If the "Toggle ON to select records and then upload files against them. Toggle OFF to upload files first and then select records for it." toggle is Inactive(OFF) then after the uploaded file we can select records for individual files. As shown below
If the "Toggle ON to select records and then upload files against them. Toggle OFF to upload files first and then select records for it." toggle is Active(ON) then we have to select records first and then all uploaded files will store in the specific records only, We will never get the option to select the record for each and every file. 