“Institutionally important for industrial capitalism”

“The transition from status-based labor to legally free labor was institutionally important for industrial capitalism,”

institutionally important means important because it changed the rules, legal structures, and organizational arrangements within which economic activity occurred.

For example:

Under status-based labor:

A person's legal position could determine whether they could leave, whom they owed labor to, and what economic rights they possessed.

Under legally free labor:

The law recognizes the worker as capable of entering an employment contract.

That is an institutional change, not merely a change in individual attitudes.