These parameters indicate which types of AX discounts (aka trade agreement discounts, aka not Retail Periodic Discounts) are currently activated and should be allowed on the transaction.
This indicates the method used to calculate the discount. Except for Least Expensive or Line-specific, these will define how a numeric discount value (defined elsewhere) is to be interpreted. E.g. if this is DiscountPercent, the value represents a percent off, if this is DealPrice, the value represents the price of the discounted item.