The Bell panel controls the terminal bell feature: the server's ability to cause PuTTY to beep at you.
In the default configuration, when the server sends the character with ASCII code 7 (Control-G), PuTTY will play the Windows Default Beep sound. This is not always what you want the terminal bell feature to do; the Bell panel allows you to configure alternative actions.
This control allows you to select various different actions to occur on a terminal bell:
This feature controls what happens to the PuTTY window's entry in the Windows Taskbar if a bell occurs while the window does not have the input focus.
In the default state ("Disabled") nothing unusual happens.
If you select "Steady", then when a bell occurs and the window is not in focus, the window's Taskbar entry and its title bar will change colour to let you know that PuTTY session is asking for your attention. The change of colour will persist until you select the window, so you can leave several PuTTY windows minimised in your terminal, go away from your keyboard, and be sure not to have missed any important beeps when you get back.
"Flashing" is even more eye-catching: the Taskbar entry will continuously flash on and off until you select the window.
A common user error in a terminal session is to accidentally run the Unix command cat (or equivalent) on an inappropriate file type, such as an executable, image file, or ZIP file. This produces a huge stream of non-text characters sent to the terminal, which typically includes a lot of bell characters. As a result of this the terminal often doesn't stop beeping for ten minutes, and everybody else in the office gets annoyed.
To try to avoid this behaviour, or any other cause of excessive beeping, PuTTY includes a bell overload management feature. In the default configuration, receiving more than five bell characters in a two-second period will cause the overload feature to activate. Once the overload feature is active, further bells will have no effect at all, so the rest of your binary file will be sent to the screen in silence. After a period of five seconds during which no further bells are received, the overload feature will turn itself off again and bells will be re-enabled.
If you want this feature completely disabled, you can turn it off using the checkbox "Bell is temporarily disabled when over-used".
Alternatively, if you like the bell overload feature but don't agree with the settings, you can configure the details: how many bells constitute an overload, how short a time period they have to arrive in to do so, and how much silent time is required before the overload feature will deactivate itself.