It is important to make distinction between the line drawn in the model that represents the frame element and the line at the actual centroid of the frame element (neutral axis). When the Insertion point example is centroid (10), these two lines coincide and checking or not checking the "Do not transform stiffness for offsets from centroid" produces exactly the same results. For any other insertion point, these two lines are in different locations and the following applies:
(1) Not checking "Do not transform stiffness for offsets from centroid" (this is the default option) has the same effect on stiffness as if the frame element is located in the actual location of its neutral axis with centroid (10) insertion point. Please note that, in this case, the actual location of element neutral axis is offset from the line drawn to represent this element in SAP2000.
(2) Checking "Do not transform stiffness for offsets from centroid" would have the same effect on stiffness as if the centroid of the actual frame element is located along the line drawn to represent this element in SAP2000 with centroid (10) insertion point is specified for this element.
Typically, you want to leave the "Do not transform stiffness for offsets from centroid" option unchecked (again, this is the default option), because this places the stiffness of the frame element into the "correct physical location".
For example, if there is a deck modeled above a frame element with top center (8) insertion point, the overall stiffness of composite section of the beam and the deck would be higher for Case 1 than for Case 2.
