Held Key States are the mode by which until released, a key remains in the "mod" (e.g. default / Shift / Alt / Ctrl) state in which it was pressed. This allows one to use a key from another Modifier (Shift, Alt, Ctrl) without automatically activating that Modifier for all keys already held.

For instance, if one wanted to bind Shift Q, W, E for various combat keys but didn't want to cancel his forward movement (W) any time he used any Shift key because there is now a Shift-W binding, this would cause the already held W to retain its default state even while accessing Shift-1,2,3,4,Q,E, or whatever else. If one wanted to activate Shift W, one would simply have to reinitiate the W keystroke / keyhold.

This is the norm for most games I play. I'm not sure why it's not the case for XIV.

If only one method or the other were possible, I believe the held state is more useful than the always-refresh method, but as other games offer the option of which to use, I don't see why that would need be the case.

Again, this is a small issue, yet one that would actually allow keyboardists 12-18 more comfortable keys without compromising movement if changed.

(A pass-intercept system is usually the final solution to these things—e.g. if the skill is able to activate, it will, and if not, it'll continue to use the base state—but this would cover the more basic side at least.)