It allows players that have Mojang account to bypass the authentication process. If player is found with the Mojang API, they are treated as online player, meaning that client will get the encryption request etc. For more technical info, see #23.

You have to set online-mode to true in server.properties. Then set the premiumAutologin to true as well in SimpleAuth's config file. This will create a "mixed" online mode server - players that have purchased Minecraft will be able to skip the login process and will have online-styled UUIDs as well. On the other hand, players that don't own the Mojang account, will have to register / login every time they join the server and will have offline-type UUIDs.

You can still force offline UUIDs for everyone by enabling forceoOfflineUuids in config file.

If you want to mark a player who has a Mojang account as "force-offline" (they will still have to login every time), you can put their name (lower case!) in the forcedOfflinePlayers list in config file.