System Setting > General > Impact of Set whether reassigned records are shared with the original owner is set to No/Yes

When you assign a record that you own or as a CRM Administrator you assign records owned by someone else to a third party you have a choice on what rights the previous record owner retains.

When a/the record(s) is/are assigned, the new user or team becomes the owner of the record and its related records. The original user or team loses ownership of the record, but automatically shares it with the new owner.

The CRM Administrator can decide for an organization whether records should be shared with previous owners or not after the assign operation. If Share with previous owner is selected, then the previous owner shares the record with all access rights after the assign operation. Otherwise, the previous owner does not share the record and may not have access to the record, depending on his or her privileges.
Example :

Let’s Talk with minimal access to user – User level Access scenario

One business Unit : West India
Three user in Same business unit – U1,U2,U3
Three Role – Ro1, Ro2, Ro3
One Entity –  Account
Ro1, Ro2 and Ro3 – Account Access level for all privileges is user level.

U1 has Ro1.
U2 has Ro2.

U3 has Ro3.

In System Setting When
Set whether reassigned records are shared with the original owner is set to No

U1 Created one record, “Record 1” and owner is U1.
In this Case
U1 will see 1 Record Owner is U1.
U2 will see 0 Record.
U3 will see 0 Record

Now let’s Reassign the Record “Record 1” from Owner U1 to U2.
U1 Change owner from U1  to U2.
Once Record is Saved U1 will get error for No Access.

In this Case
U1 will see 0 Record.
U2 will see 1 Record Owner is U2.
U3 will see 0 Record.

Now let’s Reassign the Record “Record 1” from Owner U2 to U3.
U2 Change owner from U2  to U3.
Once Record is Saved U2 will get error for No Access.

In this Case
U1 will see 0 Record.
U2 will see 0 Record.
U3 will see 1 Record Owner is U3.
Now let’s Reassign the Record “Record 1” from Owner U3 to U1.
U3 Change owner from U3  to U1.
Once Record is Saved U3 will get error for No Access.

In this Case
U1 will see 1 Record Owner is U1.
U2 will see 0 Record.
U3 will see 0 Record.

In System Setting When
Set whether reassigned records are shared with the original owner is set to Yes

Now let’s Reassign the Record “Record 1” again from Owner U1 to U2.
U1 Change owner from U1  to U2.
Once Record is Saved U1 will Not get error now.
Instead in Share grid, Record will be share with U1 with full access as before.
and Owner will be U2.

In this Case
U1 will see 1 Record Owner is U2.
U2 will see 1 Record Owner is U2.
U3 will see 0 Record.

Now let’s Reassign the Record “Record 1” again from Owner U2 to U3.
U2 Change owner from U2  to U3.
Once Record is Saved U2 will Not get error now.
Instead in Share grid, Record will be share with U1 and U2 with full access as before.
and Owner will be U3.

In this Case
U1 will see 1 Record Owner is U3.
U2 will see 1 Record Owner is U3.
U3 will see 1 Record Owner is U3.

Hope it Helps!