Without getting into too much detail,
the smiley-face icons next to each message, together with the "Hide
'sleepy' topics" link, allow you to decide which topics to display
within a module. This can be important for busy classrooms, since
it allows you (and your students) to say, hide a message that was
posted six weeks ago that you no longer want to see each time you enter
the module.
If you "Enable this module, but don't allow users to hide/unhide
topics", the controls highlighed above won't be available for that
module. Some teachers prefer it that way, since it provides a
simpler page and makes it impossible for students to hide a message and
claim they never saw it.