Marking strings as excluded is one of 3 ways to arbitrarily exclude unwanted strings that have been extracted from a project. To mark a string as excluded, right-click it in the LTE and select Mark as Excluded in the popup menu, or select it and then either select Mark as Excluded in the Edit menu or hit Ctrl-M.
Marking strings as excluded is the functional equivalent of deleting them, though they don't go away. When you mark a string instance as excluded:
The LTE displays it in dark gray and does not allow you to enter a translation. The next time you load or sort the language table, moreover, it will drop to the bottom.
When you export or import, it is not exported or imported (although you can use export/import to transfer string exclusions between projects)
When you print, it is not printed.
When you build, it is ignored even if you entered a translation before marking it as excluded.
When you update, it stays excluded.
This last point -- that excluded strings retain their excluded status during updates -- is the reason why VBLM doesn't allow you to just delete unwanted strings. If it did, there would be no record of your decisions and you would have to redo the deletions after every update. Excluding strings creates the record and insures that your work is preserved across updates. Also, exclusion is reversible: the edit menu shows Include Current String Instance when an excluded string instance is selected.
String Extraction Overview
Configuring SX Options