The "Variable is secure" option will encrypt the values in the AML code of the task.
Here's the code for a normal variable:
<AMVARIABLE NAME="varTest" VALUE="test" />
Here's the code with the secure option:
<AMVARIABLE NAME="varTestSecure" VALUE="AM5U5O36Y7+cBbsGSFxiK+sJA==aME" SECURE="YES" />
This can be valuable as the value won't be obtainable from the AML task file.
It also gives a little bit extra security if somebody happened to look over your shoulder while viewing the task in Task Builder, as the value won't be displayed.
But yes, this doesn't help too much if a user has access to open the task in Task Builder. They can simply look at the variables or display the variable in a text box.
A much better option would be to password encrypt the task.