What is the Aegir make_working_copy SCM option mean?
The 'Drush make option' field in the Aegir user interface (when creating a new platform based on a makefile) simply determines whether or not the --working-copy option is passed to Drush make.

The --working-copy option for Drush make "preserves VCS directories, like .git, for projects downloaded using such methods." (source: Drush.org)

Passing the --working-copy option leaves the .git directories intact (as if you had done a manual git clone) and hence allows you to pull in updates, etc.
However, this is not the recommended way of updating modules in Aegir, so the 'Normal - Discards SCM files' option is preferred.

The aegir_make_working_copy module provided this functionality for Aegir 1.x, before it was merged into Aegir core 2.x.