Business Policies are the very first section you will see at the top of your eBay Configuration page. For more information from eBay about their policies, please see https://www.ebay.com/help/policies/business-policy/business-policies?id=4212
Policies that you create on eBay will populate to your eBay Configuration page into the drop-down menus you will see in this section.
These same menus will populate to the eBay Attribute section of your Single Listing page (SLP) in AoB.
The drop-down list populated at the top of your eBay Configuration page will allow you to set up a Default to be used for each listing, while the drop-down menus populated in the eBay Attributes section of your Single Listing Page (SLP) which will allow you to set your policies per item and override these defaults.
It isn't required that you select a default. However, eBay will autogenerate a new policy based on your history to use for any item that is sent without this data. It's import to note at this point that having a high volume of policies created will cause your AoB eBay Configuration page to load slower.
Any edits you do, or new policies you create, will automatically update to the menu on your Configuration page. But, it will be necessary to open the Configuration page and hit the Save button at the bottom to populate the new data to your SLP drop-down menus.