We need versioning on lists and libraries to keep track of changes made to content. However, when you’re migrating content in and cleaning it up as you go, it’s not ideal to have versioning activated from the beginning, because the versions will be out of control as you clean content. It’s better to finish the cleanup then activate versioning when you release it to the team.
If you create a new library from this option on the site, you don’t have any say of the versioning settings.
Versioning is on and you can’t switch it off.
BUT, if you go via the Site Actions button, and Add an App…
Then select Document Library.
Then click on Advanced Options.
You can switch versioning off while you sort out the content. Then just go back to the Library Settings when you’re done and put it back on. Don’t forget to fill in the Description of the app to specify that versioning (and any other settings), have been activated.