OD off will lock out the topmost gear. The highest gear, in this case 4th, is an overdrive ratio and helps reduce revs for lower noise and fuel-saving. On certain steep slopes, it may be too high a ratio and the vehicle may labour up the slope whereas if you prevent the transmission from using it, then you would use a lower 3rd gear and get better acceleration as the revs would be higher up where more torque is generated. Yes, you will lose in terms of FC since the revs are higher.
The other use of OD off is when driving down a steep slope. This will help give some engine braking so you do not have to over-use the brakes. If you use the topmost gear, then you may find your speed faster than you feel comfortable and you would be braking a lot.
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