The "thermal shift" setting is a control that allows you to change the temperature of the water that's output from the air-source heat pump (ASHP) into the house's heating circuit up or down by 5°C.
Shifting the output temperature up will enable your radiators to pump out more heat, which may be necessary in very cold weather, or if your home isn't well insulated, or if your radiators are of the standard design that are sized to be run at higher (~50-60°C) temperatures.
Shifting the output temperature down will mean that there is less on-off cycling of the heat pump, which should improve its efficiency, reduce noise, and extend its life. In addition, the lower temperature should improve its efficiency in and of itself, too. This would be appropriate in a very well-insulated dwelling, with radiators sized to be run at lower temperatures (~35-40°C).
Ideally, you want the output temperature to be as low as it can be, while keeping you warm enough: so that the radiators are releasing low-level heat all the time, rather than being high temperature part of the time, and then getting switched off by their thermostatic valves for some of the time. That way, the ASHP will run at the best efficiency it can.
As the heat pump can be used in a wide variety of systems and under a big range of conditions, there isn't a single "ideal" temperature for the water it heats: the thermal-shift setting allows you to customise the output water temperature to best fit your own heating system.
So why is it called a thermal shift, rather than just "output water temperature"?
Modern ASHPs have adaptive controls that automatically adjust the output water temperature, based on external air temperature. When the outside air is warmer, then the house needs less heating, and so the ASHP control reduces the output water temperature. When it's colder, the house needs more heating, so the ASHP control increases the water temperature.
That results in an output curve like this:
| ____ Where the y-axis is output water temperature,
| \ and the x-axis is external air temperature.
If you change the "thermal shift" setting, it shifts the whole curve down or up: