I don't have a Kobo so I can't speak to the stock reader, but as someone who looks at fonts a lot, I can tell you that having this switch to turn hinting on and off is quite valuable.
Some fonts don't have hinting or have bad hinting, in which case, turning off hinting will activate freetype's autohinter and produce better results than trying to force pixels into a grid.
Fonts that have good hinting will do better with hinting on.
An example of a font without hinting, is this older version of Gentium (use the Book weight especially).. you will see that it looks much better with hinting turned off than with it on.
https://software.sil.org/downloads/r...Basic_1102.zip
For the stock reader, it really depends on how freetype is configured.. I would say just use fonts that have hinting already applied for the stock reader.
Usually hints are found in ttf fonts and not otf, though hinting can be done in otf, but it is less common.
One you could play with in both readers is the Stix Two fonts.. they offer autohinting on both the otf and ttf, but the variable font version is unhinted. So you could try the variable font first in both readers, then take it off and put in the ttf version and see how that is.
https://github.com/stipub/stixfonts/tree/master/fonts