"PIN pad" means that there is a customer-facing device with a PIN pad. Businesses with only a merchant facing terminal but that pass the terminal to the customer for PIN preferring chip cards do not count despite allowing PIN entry. Businesses without this checked have a higher probability of acceptance issues with PIN preferring cards due to many of them having poor terminal positioning.
This means that the terminal has a working slot intended for insertion of credit and debit cards. Such a terminal should not let you swipe a card with a chip and instead should force you (or the cashier/server) to insert the card into the slot instead.
If this is checked, payment was performed by the server or by the customer using a device located at or brought to the table. This is usually accomplished by Ziosk tablets or similar at every table or by a device carried by the server such as Clover Mobile and the Ingenico iWL series.