The Apple Menu Options control panel debuted as of System 7.5 and enabled users to use submenus under the Apple menu. Using this, contents of folders (up to five layers deep) can be shown. Also, recent items can be recorded (aliases of them being made) for easy access.
The On and off radio buttons toggle submenus on and off.
The Remember recently used items toggles the control panel's ability to remember recently used items on and off.