Indicator specifies how you intend to use the flow action.
Local Action – Select if you want a local flow action to update the assignment and the work item. The local action retains the flow at the same assignment shape, allowing the current user (or another user in some cases) to choose another flow action. Local flow actions can be invoked from a modal window or from a flow action form.
Connector Action – Select if you want a connector flow action that corresponds to a connector arrow in the flow, to update the work item, complete the assignment, and advance the work item in the flow. Typically, connector flow actions are invoked from a flow action form.
Local and Connector – Select to use the flow action as both a local action and connector action.
Please refer to the following page for more detailed information: