The setting you're changing adds an index at the database level.
When you move from Filter to Index, and click 'Ok', there will be a delay while CMOD tells the database to build those indexes on ALL of the database tables -- it will look like the Admin client is stuck, but it's just waiting for the database to finish doing all the work.
Because this requires a lot of work for the database, it's best to do this during a maintenance window, even though it doesn't require a CMOD outage. And finally, the setting affects old AND new documents.
Hope that helps. Take care.
-JD.