This is from the Help section of Device Setup:
“If timing problems with the recorded MIDI events occur with your operating system, try activating the “Use System Timestamp” options.
All MIDI interfaces timestamp their data before supplying it to the application. The application uses these timestamps to position incoming MIDI events in the sequencer. There may be situations in which these timestamps are not in sync with the internal time information of the sequencer, so recorded MIDI events will not be positioned correctly (usually, they occur “too late”). When you activate this option, the sequencer ignores the MIDI timestamps provided by the interfaces (for Windows MIDI and Direct Music inputs, respectively) and generates new timestamps (using the actual system time) for all incoming MIDI data.”