The Burnt Fuel Item setting in the Item List allows you to set an item that will be added to either the cooking or crafting inventory when the item is used as fuel. For example if you wanted to have charcoal added to the inventory when wood is used as fuel then you can use this setting to do that.
Keep in mind you wont receive the item as soon as the fuel item is taken from the fuel slots. The item will be added once that item has finished burning as fuel. So if you Fuel Time is 5 seconds then 5 seconds after that item was taken as fuel you will receive the Burnt Fuel Item.
You can find the Burnt Fuel Item in the ItemList near the bottom of the list.
Here you set the Data Table to the MasterItemList and then you will be able to select an item in the Row Name drop down, then you set the amount you want to receive when the item is used as fuel. Like the image below.