This setting indicates that people who are not members of this mailing list will be allowed to post

The default setting is Yes which means that if someone tries to contribute a message to this mailing list and their name or email address is not listed as a member of the list, their message will automatically be rejected

A setting of No means that the person's contribution will not be rejected. However, if the list is moderated in some way (either full or number moderation) their message will require moderator approval. For example, if your list is set to number moderate, so that new members need their first message approved, any message coming from a non-member will be treated as if a new member posted it and will require moderator approval

Allowing non-members to post and not having moderation means that anyone can send email to your list address, and it will be distributed to your members