This is because you need to activate the site feature: Metadata Navigation and Filtering. This feature is a Site feature but it is already activated on Site Collection level sites. You will need to activate the feature on blank and team site templates (subsites). Activate the feature and you will see the Per-location views setting in the site library settings.
I am not going to explain what per-location views are here, there are plenty of good blogs describing the feature. I will give you a breif example of how they could be used though- Consider a Contracts library that has one level of folders- one for each contract. These folders have the high level properties you would expect of a contract – Contract Name, Number, Owner, maybe a Supplier.. Now inside these contact folders there are a whole bunch of documents that “inherit” some of the contract folder properties (I use the word inherit carefully because properties do not propagate to child documents OOTB but you can set folder level defaults which help with picking up the values of the parent folder- this is a whole other story). These contract document also have many more properties that are relevant just to the documents e.g. Document Type, Topic, Related Discipline, etc. Per-location views can be used in this case to display a default view at the library level i.e. for the first level of folders, to display the contract folder level properties. Views can then be created for the document levels and set on the folders so a document property focus view is displayed within folders. It basically just stops you from needing to display 10+ columns in you default view even if many of the columns don’t apply to all levels (like in this provided example). Gee, I hope that made sense.