WooCommerce requires Permalinks to properly work. Woo will “mostly” work without them, but WC Vendors will not work at all without Permalinks. If you do not set your Permalinks up, you will experience random issues, such as blank pages, vendor stores not loading, etc….
Sometimes your pages might appear to be “404 not found” when all you have to do is visit your Permalink page and click Save Changes even without making any changes on the page. This is common when some plugins update on your site and break them, or you install a new one for the first time. It’s not a bug, it’s just the way WordPress is. 🙂
2.) Configure them any way you want, as long as it is not “Default”. The recommended settings are highlighted.