The membership settings are used to determine what members are eligible for each discount. This setting allows you to set discount eligibility by memberships status.
When you create a discount don't forget to review this section and either include or exclude the membership statuses you want to receive the discount. By default only Current and Waitlisted members receive a discount. Members with a Hold, Expired or Cancelled status aren't automatically eligible for a discount and if you want them to be included they need to be enabled.