Well, the "Graphics Scaler Speedup" option is mainly related to the graphics chip in the megacd that does scaling and rotation.
MegaSD memory is much faster than the original megacd DRAM memories, so accesses can be done faster, and also, megasd can do some tricks to avoid reading data if it knows it's not going to be drawn (because it's outside a tilemap, or an entire tile line is transparent), that makes the graphics scaling operations faster in megasd. This generally doesn't have any adverse effects, in original firmware it was always enabled, but it lacks original accurracy, so disabling the graphics scaler speedup option will introduce delays in memory accesses, and disable all optimizations so the render speed is the same than the original hardware.
If you watch Mi Life in Gaming youtube video posted last week, there is a section where it shows the difference between scaler speedup on and off in the batman returns intro. Also batman returns car game is faster with it enabled.