These are very poorly named. They would seem to do the exact same thing but who could tell?
"Keep track of who created and last updated features" add 4 fields to your service: Creation Date, Creator, Edit Date and Editor. These get automatically populated as edits are made. This has a similar function to enabling editor tracking on a feature class. I still can't tell what "Keep track of created and updated features" actually does.
Yes, you can disable this feature but you must manually delete those 4 fields if you don't want them any more. They'll be there but no longer get updated.
A bit of caution - enabling "Keep track of created and updated features" seems to come into conflict with editor tracking imported when you create a service from a feature class with that enabled. The editor tracking from the feature class will work (fields continue to update) until "Keep track of created and updated features" gets enabled and then they stop updating. Even if you then disable it that relationship will be broken. Ideally you should not be allowed to have both enabled because that doesn't really make sense but currently thats how it is.
