When you use a cursor image, by default the top-left corner of the image is considered the "Hotspot" for the cursor. Which means that, the top left corner is actually gonna have the ability to do all the clicking, hovering and everything else a cursor can do, not the whole image of the cursor, the whole image is just for design, that one pixel Hotspot at the top-left corner is where the true cursor is.
Let's look at the example below, the first image is a cursor and the second image is a pointer. Now the white dots that you see, those are the places that can be hotspots. So, for the cursor, if you choose the "Top Left" option then that pointy part of the cursor is gonna have the Hotspot. And for the pointer, if you choose the "Top Center" option, then that part is gonna have the hotspot. For the third image (heart icon), we should select it's hotspot as "Center Center" because the icon doesn't have anything pointy on it like the first two icons.
The reason that this feature was requested by our users is because, if you leave the Cursor Hotspot as default, then it's gonna be Top-Left by default, but if you look at the 2nd image, the thumb is actually at Top-Center, which is misleading to the customer. This is why we needed to have an option to choose the right Hotspot for the right icon, and now we have the option.