Checked means it applies to all members of the Group. Filled means some members are checked, some are unchecked.
Don't get me started on how the setting the Settings works - it is crappy and will not do what you expect. If you move someone into a group they will not get the group settings. You have to reset to get it where you want (you can reset it for the whole group, or you can go to the new user and fix their settings to match).