The management traffic option on a VMkernel port is used to allow management access to an ESXi host. You use that IP for connectivity to the vSphere Client, vCenter, etc. By default ESXi has a VMkernel port called "Management network" that has the "management traffic" option selected.
You can assign multiple IP addresses to be used for management traffic. Some folks do this as an alternate means of accessing the server should the first one go down.
If you've ever used Classic ESX before, the "management traffic" option on a VMkernel port group is the same as having a Service Console port group.