The phone options context menu provides you with a number of different forwarding options. These forwarding settings control the local device, i.e. any call that is reaching your local phone (virtual or physical) will be forwarded to the specified number.
You can either choose not to forward any phone calls or select a telephone number from the list. The numbers you can forward to are defined by your forwarding rules and your contact info. For more information see The Forwarding View.
The forwarding settings selected here will override any existing forwarding you currently have chosen. Note: It is also possible to have Totalview set your forwarding when you change your state.