You can find basic information about the Parent Field option here
By clicking the “Connect” button Listivo will assign all child terms (e.g. Banana) to Parents (e.g. Fruit) based on listings that are in your database. It can be useful if you imported a database of listings (e.g. via WP All Import) and you wish quickly create this type of parent-child relations for your search form or “submit listing” form.