This refers to the Meta Title tag that is displayed in the browser tab and in the source of your Page between the <title> tags. It is enabled by default and the formats shown in the Format fields below control how they will appear (see below).
Capitalize Titles / Capitalize Category Titles
These settings are checked by default and control whether Meta Titles will be capitalized. Check them if you want each word in a Page Title, Tag Archive Title, or Category Archive Title to be capitalized.
Title Format Fields
The Format fields control how your Meta Titles will be formatted for each type of content. These settings can be changed if you wish. The supported formats are shown in the inline documentation for each field. Leaving them as default would, for example, output a Meta Title for a Page as “Page Title | Site Title”.