Use the remote user to map users not defined in Local login.
This could be better explained in the documentation. Let's use two clear terms just for this answer to avoid confusion.
- Local server = Where you are creating a linked server
- Remote server = Server you are connecting with Linked Server
Local Login = Can be SQL authentication or Windows authentication that exists on the local server.
Remote User = You can only use this option if you have impersonate unchecked. Otherwise, you pass a SQL login and password that exists in the remote server. This is nicely explained in this article by Marko Zivkovic.
The remote user option allows users from the local SQL server to
connect to the linked SQL server even though their credentials aren't
present on the remote server by using the credentials from the user
that exists on the remote server. Basically, it allows local logins to
connect to a remote server as a different login that must exist on a
remote server.
What Impersonate means:
Pass the username and password from the local login to the linked
server. For SQL Server Authentication, a login with the exact same
name and password must exist on the remote server. For Windows logins,
the login must be a valid login on the linked server.
