This button shows you whether there is an active filter applied on the object list or not. If there is a filter, the button blinks red and attracts your attention to the fact that you might not see all the objects that are really there.
In the default configuration, LEX shows all objects in the object
list panel which are returned from the server. However, you can configure a filter which
is applied to the request. So if you want for example that only group objects are shown in
the list, you could display then groups in an entire subtree (a combination of setting the
correct filter and configuring the appropriate object
To activate and configure a filter for the object list, you can also use the menu option Tools - Options - Object Filter. If you do this (or if you just press the Set object list filter button), the appropriate dialog for configuring the object filter is shown:
You can easily save and load filters from disk here. LEX stores the appropriate filter files in the Profile and Filter Storage Path in the Subdirectory LDAPFilter as text files.