This is an old thread, but thought I would answer in case someone stumbles on this like I did searching for 9F6E settings. (Many thanks to iso8583.info for the reference to Book C-4).

Book C-4 states that if bit 8 is set then bit 3 "Try another interface after decline" must also be set. This means if the card is declined for some reason via contactless, the customer can be prompted to insert to attempt it as Contact. It's a user experience thing instead of them trying and trying contactless.