While most of the red and green marks inside the Group Policy editor are underlining text, you will occasionally find red and green circles hovering around particular settings. Their purpose is exactly the same as the underlines. Sometimes, underlining text doesn't show up well or it is difficult to determine what setting you are manipulating, and so Microsoft switches to circling the settings.
A green circle means that particular setting will process on a machine when the GPO applies, and a red circle means that setting will be ignored. You can see in the following screenshot that these circles show up inside Internet Explorer preferences:
As an exercise to ensure this is all making sense, let's walk through some ...