Please guide if ignoring virus targeting (checking ‘ignore virus targeting’ option) helps & improves detection rates?
Is it possible to answer as to which type of users can be most affected if they do not check this option?
I dont know how to ask this properly - Is the no. of viruses that exclude the expected behaviour ( those which target other files that they shouldn’t normally) is insignificant & so we need not bother?
You should keep Virus Targeting Off as per the default setting. 
I would suggest you leave this at the default setting (unchecked) as enabling it can result in detections of malware in memory (which are in fact virus signatures of other security applications).
Have you not read the avast help file (Help Center button), see image relating to Ignore Virus targeting.
I read that. From there only I got the idea that keeping this setting on may improve the real time detection. So I thought its best to have the expert opinion on this.
In theory, detection shouldn’t change much (at all) while it might help prevent false posiives when finding strings that are just randomly there in harmless file. But those are usually excluded from scan anyway. But still.