Meaning of "guest" in file sharing
‘Allow guest users’ refers to connecting to the server without any authentication as a Guest, in comparison to using the Registered User option which requires a username and password.

If you choose to not allow guest users, it's not possible to connect using the Guest option in Finder, or otherwise not providing credentials when using another tool.

                                      

This is not related to the Guest account in macOS, but there is an option in Users &amp; Groups to enable/disable guest access to shared folders here: