I think that the current wording is a more precise description of what the plug-in actually does. The plug-in has a “rule” to mark sounds that are above the threshold level, but this control creates a “special case” for short sounds that have recognised silence on both sides. In this special case, the effect is told to disregard the first rule and so not mark that sound.
If you’re happy that “ignore sounds less than … seconds” conveys the idea adequately then we can go with that.
As is the case with most of the more “advanced” tools (e.g. Compressor, Contrast, Auto Duck, Noise Removal…)
We can just squeeze in both controls if we reduce the ;info to one line of text.
Stopping overlap overrules the label position settings. In practice this can be quite useful as it provides a means to mark the middle of each silence, which can work very nicely when transferring a cassette album to CD.
As described in the Sound/Silence Finder enhancements topic, the “distinguishing purpose” that you are referring to is an illusion. Both Sound Finder and Silence Finder create labels relative to detected sounds - in the case of Silence Finder they are point labels and in the case of Sound Finder they are region labels - other than that they are near identical (and share much of the same code).
The real distinguishing feature is that Advanced Sound Finder is far more flexible with a more powerful algorithm than either of the “simple” effects.
Whatever defaults we choose it will not suit everyone. The best that we can try to do is to please most of the people most of the time. If we have any way of knowing which option most of the people want then that’s the one to go for. In the absence of such information my guess is that most users would want point labels most of the time.