Hi Vikram,
This BADI is called from FM MASTER_IDOC_DISTRIBUTE and COMMUNICATION_IDOC_CREATE and ALE_IDOCS_CREATE ( Replacement for MASTER_IDOC_DISTRIBUTE for asynchronous BAPIs ).
So I would say it covers almost all the outbound master data sending via Idocs and also the custom program where we use those above mentioned FM.
I am yet to find a Master data object which does not call this BADI while generating the outbound Idoc.
No there is no special configuration needed but it may not be available to older version before ECC. Not sure about that. And Transaction data is not covered as you might know that we have other techniques to stop them.
R