The idea is simply that the instructor has the option to either:
A. Have a strict zero-grade for late submissions where the submitted assignment - especially one with open ended questions - is automatically scored and shows a zero in the grade book. Or,
B. Show that grading is in progress for instructors who will accept late assignment, but at a penalty, and still needs to grade some of the questions.
For example, a homework assignment consists of open ended questions that need to be manually graded. In my case, I want any homework submitted late to be automatically graded as zero in the grade book. For Steven, he can choose to have such late assignments display "grading in progress" instead of a zero so students do not contact him about why they have a zero.