I think there might be some confusion here. This feature is not directed at files you download from the internet that you save on device. I believe this feature change is directed at files that are kept on iCloud Drive. Currently, those files (for example, a file in Pages) are only downloaded to your iPad as needed, when you open the file. You can edit the file, close it, it will upload the new version of the file to the cloud, and it will keep the file on device for a short period of time, in case you want to reopen it again. However, eventually the iPad system will delete the copy on the iPad. The user has no control over when it does this, and if the file has been deleted, it will have to download from the cloud again the next time you open it. This feature change allows you to tell the system not to remove the iPad copy. For those files you mark to keep, it will work just like it does on the Mac for files kept on iCloud Drive—it keeps a local copy and keeps that copy synced in the cloud.
Edit: I definitely need to learn to type faster.