As explained in the Container Overview article, typically a website can have two containers viz: Primary Container and Secondary Container.

Primary Container is where the main content appears, whereas Secondary Container consists of the sidebar and various different widgets in the sidebar.

“Full Width / Contained” layout combines the primary and secondary containers and displays in a single container in a clean format. That means content and a sidebar will display side by side in a single container. This container will display in a container width, leaving a space around the container.

You can find the setting under Appearance > Customize > Global > Container

Full Width / Contained layout is great for websites that need a clean design without any boxes. We set this layout as default in our integrations with WooCommerce.