Final answer:
Setting a custom URL as the 'instance URL' designates that address as the default one for a specific instance of a web application, allowing easy access with a human-readable address.
Step-by-step explanation:
When referring to a custom URL form, the option to Set as instance URL typically means that the URL (Uniform Resource Locator) you are configuring will be used as the default address for a particular instance of a software application or platform. For example, if you are working with a content management system (CMS) or any web-based application that supports multiple environments (such as development, staging, production, etc.), setting something as the instance URL means that this is the specific address you or others will use to access that particular instance.
An instance URL is especially important when an application has several different versions running for different purposes. By setting a custom URL as the instance URL, you are assigning a human-readable and easy-to-remember address that directly points to a specific version of your web application, making it simpler for users to access without having to remember complex default URLs that may be automatically assigned by the hosting environment.