These two settings control the lock and refresh behaviour of Data Tags as well as the default lock and refresh behaviour of any new Content Sections added to the template. The settings can be overridden on the individual Content Sections afterwards, if required.
The Lock after Merge setting only remains a valid option when the output document remains in .docx format. Converting to .PDF will render this setting useless as a PDF is a protected document.
The 'Preserve empty content sections' checkbox can be ticked to preserve content section placeholders that are empty after merge.