The avast community feature passes information on suspect files, detections, etc. back to avast for analysis. Should those prove to be infected/malicious, they can be added to the virus definitions and quickly passed back to avast users either through the streaming updates or regular updates.
When left unchecked that information won't be passed up to avast, but you won't be left out in the cold and would benefit from this early analysis (from other community members) and updates.
The information passed up to avast is anonymous, so you should have nothing to worry about by being an avast community member helping to improve detections.