Rebuild features on cache clear I have a distro with many preinstalled features (Panopoly). 

Since I have upgraded core to 7.24 I can see an additional setting at admin/structure/features/settings, see attachment.



On production, is it best to disable the "Rebuild features on cache clear"? This is active by default.
Yes, it is best to disable this in production for the performance reasons mentioned.

I think the only times you would want to rebuild the feature list is when you are using the features and/or modules lists (as designed). Spending the resources to reload that when clearing cache for themeing purposes would be unnecessary.