Right-click Tool - Show> Show Modes/Options ??

Can I ask what this actually shows/hides? I've been playing around trying to work out if having this on or off makes any difference and so far I can't find anything it actually does.

So, if it does something does its name need to be changed to make it clearer what it actually does (can't find anything in the user manual either)? Or, should it be removed as all the mode icons show regardless if it is selected or not ...

From the manual:

This will display icons in the tool tile depicting various states, like Disk caching or Locked.

It is a description of the preferences option, but it is the same for the tool option.

However, you will only see difference in the tool tiles mode displaying behavior if you have the "Show Modes/Options " option under Global preferences -> Flow, unchecked.
If it is checked, then all tiles in your new comps will show the icons by default and checking/unchecking it on particular tool won't have any effect.

Thanks Ivan, that's helpful. I guess it may be too much to ask for the option to not be available on the Tool Context Menu if it is selected in the Preferences ... but at least I know what's going on now!