When circular logging is disabled, all the transaction logs are kept until the next full backup. When circular logging is enabled, it deletes the transaction logs after the changes have been applied to the Priv Info Store.
It is best that you disable circular logging, this because when the Priv Info Store is corrupted, but you still have the transaction logs, you can recover all mails up until the corruption using the backup. If enabled, you only have the mails on your backup.
On the other hand does Circular logging saves some disk space.