These flags serve two purposes.
First, the application can call set_open_flags using these flags as a bitmask. This tells the sidebar that the application is able to open folders selected from the sidebar in various ways, for example, in new tabs or in new windows in addition to the normal mode.
Second, when one of these values gets passed back to the application in the open_location signal, it means that the application should open the selected location in the normal way, in a new tab, or in a new window. The sidebar takes care of determining the desired way to open the location, based on the modifier keys that the user is pressing at the time the selection is made.
If the application never calls set_open_flags, then the sidebar will only use NORMAL in the open_location signal. This is the default mode of operation.