Normally the chapter title is displayed in the table of contents (TOC) AND as a heading above the content.
If the custom titles checkbox is ticked, the chapter title is NOT displayed as a heading above the content. A different title (perhaps longer than the chapter title) may be entered as part of the content.
You will be prompted to add your first page (chapter) when you create the book. Add in a title (this will show in the book table of contents) and content (this will display in the main page area).