identity in nonunique index automatically includes an IDENTITY column in a table’s index keys so that all indexes created on the table are unique. This database option makes logically nonunique indexes internally unique and allows those indexes to be used to process updatable cursors and isolation level 0 reads.
The table must already have an IDENTITY column for the identity in nonunique index option to work either from a create table statement or from setting the auto identity database option to true before creating the table.
Use identity in nonunique index if you plan to use cursors and isolation level 0 reads on tables that have nonunique indexes. A unique index ensures that the cursor is positioned at the correct row the next time a fetch is performed on that cursor.
Do not confuse the identity in nonunique index option with unique auto_identity index, which is used to add an IDENTITY column with a unique, nonclustered index to new tables.