Manufacturing tolerance refers to the minimum and maximum diameter of the printer filament. A 1.75mm filament manufactured with a tolerance of +/- .05mm means simply that the filament diameter will be no narrower than 1.70mm and no wider than 1.80mm. What does this mean to your printer?
A 3D printer is very precise from a "movement" or position (X,Y and Z) standpoint, but other functions are less precise. Printer filament delivery to the extruder is one of these less precise functions. In a perfect world, the level of filament available for extruding would be managed separately from the amount of filament being used. This could be accomplished with a melted filament "tank" where a level of melted filament waits to be delivered, similar to a the water level in a washing machine. The washing machine doesn't know what the water pressure is or how fast it is flowing in, it uses a sensor to shuts the water off when the tank is full. If the water level drops, the valve can be re-opened to let more in, preserving the water level in the machine.
But, obviously, printers are not washing machines. In a 3D printer, the filament is delivered linearly via gears.
As the hot end extrudes, the filament needed to replace what has been extruded is calculatedbased on a pre-configured ratio between the extruder nozzle and the expected diameter of the incoming filament. As it deposits filament on the bed, the gears feeding in the filament are turned the correct number of "teeth" to push new filament in. Because the filament needs to be melted, there is a very small amount of melted filament that will make up for minor differences in diameter, but what's important is that the printer does not measure or monitor the amount of filament coming in.
So, is filament manufactured with a .+/- .02 (or some number less than +/- .05) better for your printer? Not necessarily, what is more important than the actual tolerance is the filament's consistency with it's optimal diameter (1.75mm). A +/-.02mm filament that is inconsistent with the optimal diameter (e.g., the entire length is all - .02mm or 1.73mm), over the course of a long print run may deliver significantly less filament than a .+/- .05mm filament that is truer to its optimal diameter. Similarily, a +/- .02mm filament that is primarily at the high end (1.77mm) will deliver too much filament. If your printer is configured properly, a good +/- .05mm filament will work as well as a .+/- 02mm filament. If it is not configured properly, a .02mm filament may work but primarily because it is compensating for the printer misconfiguration, not because the +/- .02mm filament is necessarily better.
Configuring your printer's filament feed is fairly straightforward, we recommend this procedure and our printer calibration tool set.