This will cause libcwd to use GNU libbfd to load debug symbols and line number information. If you don't have an ELF32 system then you might need this. You will need libbfd.a and libiberty.a, which are part of GNU binutils.
Libcwd supports natively ELF32, stabs and DWARF-2 at the moment. If you have an operating system that is non-ELF32, or that uses natively COFF, then you might want to use this. Otherwise there is no need to use libbfd.
This is disabled by default. You can enable it by specifying –enable-libbfd during configuration. Of course you'll need a working libbfd installed in that case.