Suggestions:
We specify the item category usages which control the usage of an item. Item category usage controls, for example, standard item, free item or a service item.
Yes, it is important as the item will not be available for use in any transactions if the item usage field is not defined in the item master. E.g in sale order item pophelp will not show the item for selection. Usage specifies the usage of the Item in the line item of a particular Sales document.