In the sim it’s primarily used as a staging location for the newest database to be activated as the primary, in-use database (“active data base”). Under the hood there’ll always be two databases available; one is the default nav data that comes with X-Plane (which changes when Laminar pushes new major versions of the simulator), the other is the content of your custom data directory, where third-party nav data is installed, e.g. from Navigraph.
The CHK DATA BASE DATES message is showing (and the database date range text is in yellow) because your sim’s date is outside of the valid range for the nav data cycle that’s active. As you can see your sim is set to the 22nd of March (“DATE”).