The particular option should be enabled to apply the featured image. See the picture below.
 
The featured image can be:
- Specified by adding an extended attribute in the document named ‘featured_image’ or ‘Featured Image’.
 - Taken from the document’s body.
 
And, it can be chosen by click on the link which source to use (see picture above). There are three modes:
- separate attribute 
Extract only from the extended attribute.
 - separate attribute or 1st body’s image 
Extract from the extended attribute. If it is not found then extract from the document’s 1st body’s image.
 - 1st body’s image 
Extract only from the document’s 1st body’s image.
 
The extended attribute’s value can be:
- The physical URL of the existing WordPress media picture (marked as a link or not) or inserted linked image with that URL. The plugin detects that the picture URL is the media picture and set it as a featured image. To obtain this URL, we should go to the particular image in the Media Library, click on ‘Edit’ and look at the ‘File URL’ property.
 - Embedded or linked image as similar to body image. In this case, the image will be automatically uploaded and set as a featured image.
 
Note: The image is always placed in the media library.