You can control the Preedit/Status window placement in this panel if your application specifies the root window style Preedit or Status.
Selecting "Position on the screen" places the window in a fixed location of the workspace. This window is shared by multiple applications whose input style is root window style.
Selecting "Position relative to the cursor" places the window close to the mouse cursor.
Selecting "Attach to client input window" places the window near the application's input window.
In addition to the placement of the Preedit/Status window for the root window style, you can configure the behavior of the preedit string when it reaches to the end of a line. In the default, the preedit string will wrap around to the second line. But if you de-select "Wrap long lines in on-the-spot preedit," the preedit string will not exceed one line and it will scroll when reaching the end of a line.