What is the significance of profile option Node Trust Level in Oracle Apps?

If this profile option is set to a value of external against a server, then it signifies that the specific mid-tier is External i.e. it will be exposed to the www.

In other words this server is not within the firewall of your client. The idea behind this profile option is to flag such middle-tier so that special restrictions can be applied against its security, which means a very restricted set of responsibilities will be available from such Middle-Tier.