This tells that the skin name is 'terminator'. It is used by the 'skin' command, in the console. You would type 'skin terminator' at the console to change the skin manually, of course it's easier to use the multiplayer menu. As you see, the name of the skin is used as the name of the team. We should fix that later.
TERM Tells the name of the sprite to use for the skin.
Sprites in Doom uses only 4 letters, the original player graphics sprite is 'PLAY'. It is not needed to rename the player sprites like this. Doom Legacy only uses STFB0, and remaps the green color to the color of the player, just like for the sprites. These lines tells new sounds to use for that skin in particular, in place of the game's original sounds. Any of the 10 sounds can be replaced, or all.