What does “threads” mean?

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We can limit the CPU threads/process-workers from 3, 2 or 1 and it means the concurrent CPU threads of optimization. For example if you set the Optimization setting to Optimize in Background, and you have 100 visitors it can start 100 CPU threads if you won’t limit them. Your shared server will probably “die” if there will be 100 concurrent CPU threads on it. 
If you limit threads, the plugin will use only limited number of CPU threads for optimizing/building the cache and throw every other connection. In average, it is 1 to 3 CPU thread, depending on your on the server and the settings. On your own server, you should not limit it. On a shared server, you’ll have to limit it or else your host will give you CPU resource warnings.
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