This option defines the first version of NixOS you have installed on this particular machine, and is used to maintain compatibility with application data (e.g. databases) created on older NixOS versions.
For example, if NixOS version XX.YY ships with AwesomeDB version N by default, and is then upgraded to version XX.YY+1, which ships AwesomeDB version N+1, the existing databases may no longer be compatible, causing applications to fail, or even leading to data loss.
stateVersion mechanism avoids this situation by making the default version of such packages conditional on the first version of NixOS you've installed (encoded in
stateVersion), instead of simply always using the latest one.
Note that this generally only affects applications that can't upgrade their data automatically - applications and services supporting automatic migrations will remain on latest versions when you upgrade.
Most users should never change this value after the initial install, for any reason, even if you've upgraded your system to a new NixOS release.
This value does not affect the Nixpkgs version your packages and OS are pulled from, so changing it will not upgrade your system.
This value being lower than the current NixOS release does not mean your system is out of date, out of support, or vulnerable.
Do not change this value unless you have manually inspected all the changes it would make to your configuration, and migrated your data accordingly.