It’s also confusing because it assumes that the person configuring the setting understands the internal implementation of trust level groups. Taken at face value, I’d assume that the default configuration of the setting was saying that any user who is not an admin, moderator, or TL0 user would require their posts to be approved. The setting is actually configuring the minimum trust level group that does not require approval.
The setting’s default value (admins, moderators, trust_level_0) configures the site so that any user can post without approval (ignoring settings mentioned in @Heliosurge and @Moin’s posts). To require TL0’s posts to be approved, you’d remove trust_level_0 from the setting and add trust_level_1, etc…
The person configuring the setting needs to know that membership in a trust level group also grants membership in lower trust level groups. The setting’s description doesn’t make that clear: “Posts created by users not in these groups must be approved.”