The property create object is meant for showing data in a nested data view (a data view in a data view). So imagine the case that you have a nested data view with the property create object on false and a reference selector in the outer data view. This behaves as follow: The object you select in the reference seletor of the outer data view is shown in the inner data view.
I think in other situations the create object property is ignored. I hope this will help you out.