The sun/moon button is asking you whether you want it to work 24 hours a day, or only when it is dark.
If it is on the sun option, it means that the motion sensor will always trigger, no matter what the current light reading is.
If it is on the moon option, the motion sensor will only trigger if it is also dark.
I think there is supposed to be an indication on the top of the sensor when you change from one or the other, but I don’t know that for sure.
The other button to the right is the dim setting you want the bulbs to use if you have the motion sensor directly controlling Tradfri bulbs. It is a choice between 30% bright setting or 100% bright setting.
So if you were using this inside a closet, for example, if you use the sun setting and the 100% setting than the lights would come on to 100% 24 hours a day when motion was detected.
If you wanted to use it for a nightlight, you might use the moon setting and the 30% setting and then the lights would come on to 30% but only if it was dark in the room when motion was detected.
Again, I don’t have one of these, so I don’t know what the indicator is to let you know what it is currently set to, hopefully someone else will.
Also, I don’t know how these work when the sensor is used directly with smartthings. The people in the following thread should know those answers:
Ikea motion sensor