This feature is simply a convenience to keep your templates tree view clean while you or your users are creating documents or looking through templates.
Inactive templates, group templates, folders, and the templates they contain are hidden in the templates drawer and in the Template Editor unless the Hide Inactive check box under the Shared or Personal tree views is not checked.
If you are creating or editing templates or if something is wrong with the template, such as an invalid TIU object, you can make the template inactive so that it doesn't clutter your display.
When the template is ready, you can select the template and click the Active check box to make it appear.