Yes, if you choose NO, each copy of bash in all of your clones will use the same Oblivion Mods\ folder. Some of Bash's settings are stored in that folder, meaning that none of your copies of Bash will have unique settings.
This sounds like it could be a good thing, but it makes a mess when you realize that Bash is keeping track of your plugins for each clone. When you switch clones and restart Bash it will be freshly confused everytime, thinking that it's still looking at the last clone you had activated.
Clear as mud I bet?

In any case, I strongly suggest you configure the Oblivion Mods\ folder to be different for each copy of Bash you have.
Not to worry, it's pretty easy, even if you didn't have mTES4 do it for you.
How to manually configure Bash's Oblivion Mods folder: (for each copy of Bash)
1. browse to the mopy folder.
2.
copy and rename Bash_Default.ini to Bash.ini if you don't already have a Bash.ini file
3. open Bash.ini in notepad.exe
4. this is optional, but it will make it much easier to read the ini file... from notepad's Format menu, select Fonts and change the font to FixedSys (any fixed-width font will do, if you know what that means)
5. now in the ini file, find the line that reads 'sOblivionMods=..\Oblivion Mods'
It's near the top of the file, the first setting under the General section.
6. change the path to the Oblivion Mods folder for this copy of Bash.
What I do is change it to something like 'sOblivionMods=..\Oblivion Mods\Original Copy'
Another clone copy would use 'sOblivionMods=..\Oblivion Mods\Modded Copy', etc
7. Save the changes to the Bash.ini and that's it. Be sure to configure the bash.ini for each copy of bash.