This option enables a sysfs loading facility to enable firmware
loading to the kernel through userspace as a fallback mechanism
if and only if the kernel's direct filesystem lookup for the
firmware failed using the different /lib/firmware/ paths, or the
path specified in the firmware_class path module parameter, or the
firmware_class path kernel boot parameter if the firmware_class is
built-in. For details on how to work with the sysfs fallback mechanism
refer to Documentation/driver-api/firmware/fallback-mechanisms.rst.

The direct filesystem lookup for firmware is always used first now.

If the kernel's direct filesystem lookup for firmware fails to find
the requested firmware a sysfs fallback loading facility is made
available and userspace is informed about this through uevents.
The uevent can be suppressed if the driver explicitly requested it,
this is known as the driver using the custom fallback mechanism.
If the custom fallback mechanism is used userspace must always
acknowledge failure to find firmware as the timeout for the fallback
mechanism is disabled, and failed requests will linger forever.

This used to be the default firmware loading facility, and udev used
to listen for uvents to load firmware for the kernel. The firmware
loading facility functionality in udev has been removed, as such it
can no longer be relied upon as a fallback mechanism. Linux no longer
relies on or uses a fallback mechanism in userspace. If you need to
rely on one refer to the permissively licensed firmwared:

https://github.com/teg/firmwared

Since this was the default firmware loading facility at one point,
old userspace may exist which relies upon it, and as such this
mechanism can never be removed from the kernel.

You should only enable this functionality if you are certain you
require a fallback mechanism and have a userspace mechanism ready to
load firmware in case it is not found. One main reason for this may
be if you have drivers which require firmware built-in and for
whatever reason cannot place the required firmware in initramfs.
Another reason kernels may have this feature enabled is to support a
driver which explicitly relies on this fallback mechanism. Only two
drivers need this today:

o CONFIG_LEDS_LP55XX_COMMON
o CONFIG_DELL_RBU

Outside of supporting the above drivers, another reason for needing
this may be that your firmware resides outside of the paths the kernel
looks for and cannot possibly be specified using the firmware_class
path module parameter or kernel firmware_class path boot parameter
if firmware_class is built-in.

A modern use case may be to temporarily mount a custom partition
during provisioning which is only accessible to userspace, and then
to use it to look for and fetch the required firmware. Such type of
driver functionality may not even ever be desirable upstream by
vendors, and as such is only required to be supported as an interface
for provisioning. Since udev's firmware loading facility has been
removed you can use firmwared or a fork of it to customize how you
want to load firmware based on uevents issued.

Enabling this option will increase your kernel image size by about
13436 bytes.

If you are unsure about this, say N here, unless you are Linux
distribution and need to support the above two drivers, or you are
certain you need to support some really custom firmware loading
facility in userspace.

source code:

drivers/base//firmware_loader/fallback_table.c