One File Per Actor saves the data for each actor instance into its own external file rather than into the level itself. It is enabled by default when you use World Partition.
Epic's documentation states its purpose plainly: because actors are saved to individual files, you do not need to check out the Level file from source control to change the actors inside it, which frees that file for the rest of the team. OFPA is a source control feature first and a storage detail second.
In your project folder the effect is visible. The .umap shrinks to a shell holding grid and data layer settings, and a `__ExternalActors__` directory appears alongside it holding one binary .uasset per placed actor, with hashed filenames. A moderately populated open world produces thousands of them.
The benefit is genuine parallel work: two artists dressing different districts of the same city touch entirely separate files and never collide. The cost is that your repository's shape changed from a few enormous binaries to tens of thousands of small ones, and not every version control system handles that equally well. Git LFS in particular degrades, because every actor file needs its own pointer and the index grows with it.
OFPA does not remove the need for locking. Each actor file is still binary and unmergeable, and Blueprints and shared materials were never covered by it.