It means
the OBS recording was made (if default setting, then to) MKV format/file.
Auto remux means that once the OBS Recording ended (ie creation of MKV file), then convert that video file to MP4 format (which some people prefer, or their video editor requires, etc)... hence 2 files... the original (MKV) and the video/file format converted version.. the MP4 file
You can record direct to MP4... but that is highly recommended against [search this form for technical explanation of why, if curious], hence the Remux option being available.
Hope that clarifies/explains for you
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