The new feature prevents USB accessories from connecting to the iOS device if the device has been locked for more than an hour (although there does seem to be a limitation to this).
Here's where the new setting lives:
Tap on Settings > Touch ID & Passcode (or on the iPhone X Face ID)
You will now need to enter your passcode/pincode, then scroll down until you reach USB Accessories. Below shows the feature off...
An here it is turned on:
It also turns out that activating SOS mode - pressing the power button five times in rapid succession - disables the USB port along with forcing passcode entry (this works no matter what option you choose from the screen, even if you choose cancel).
iOS 11.4.1 tips, tricks, and secrets everyone should know