I ran into this option on a customer system, the commit entry currently best documents it's usage:
Author: Andrew Tridgell <email@example.com>
Date: Wed Sep 17 15:37:54 2008 +1000
re-added "winbind:ignore domains" patch
This option really is essential, as we discover again and again at
customer sites. Due to bugs in winbind some domains are toxic. When
you are installing at a site and a particular domain in a complex
setup causes winbind to segfault or hang then you need a way to
disable that domain and continue.
In an ideal world winbind could handle arbitrarily complex ADS
domains, but we are nowhere near that yet. If we ever get to that
stage then we won't need this option.