What version of MATLAB and Simulink are you using? If it's R12 then that's 10+ years old by now, and there is no feature ModeIterationsInAlgLoops in more recent versions.
> 1) How can I do the thing that the warning wants me to do?
Note that there is a typo in the error message -- it is missing an opening parenthesis. To get it to work do the following at the MATLAB command line >> feature('ModeIterationsInAlgLoops',0);
> 2) How does using feature 'ModeIterationsInAlgLoops',0) helps suimulation to excecute better?
It doesn't necessarily. It just stops Simulink trying to use the algebraic loop solver introduced in R12 in favour of using the "older" one used in R11. Someone who had a model in R11 and wanted to try using it in R12 might be surprised that they get different results. This enables them to turn off one of the changes in the "newer" version to see if it is the reason for them getting different results.