How to enable this feature?

You enable the feature by checking the checkbox in the Bongo Document Options page under the General section. Please see here.

What does it do?

Governs whether animation data on objects inside instances (blocks) will be animated. This can be rather slow, so this is off by default. Using this option, it is possible to create animated blocks that can be reused in the model.

Which features does it support?

Animate inside blocks is only added to Bongo 2.0 so that users that used this feature in Bongo 1.0 can continue with their workflow. This means that it only supports the same features as it did in Bongo 1.0. These are: position, rotation and scaling.

Will it support the IK feature or Morphing?

Unfortunately due to how blocks work inside Rhino, it is impossible for Bongo to support these advanced Bongo 2.0 features inside blocks.