The Simple grid type does not use this method of creating the grid so prefabs are ignored.
The prefabs are the cells to be used during the build process. If there is no prefab, the grid will still run, but just leave the cell without a physical object in it. If Auto Cell Blocking is on, this again will still run without prefabs, and cells will still be marked as free or taken, but without anything physical to represent it.
Grid Cell Prefab
Places a selected prefab in any cell that is not marked full at runtime.
Second Grid Cell Prefab
If the Grid Type is set to Checkered a second prefab is used to create the pattern.
Block Above Cell Prefab
If Auto Cell Blocking is on, places this prefab on any cell that is not placeable above the grid. If the grid is blocked by rocks or mountains, this would place this prefab around them to create a border.
Blocked Below Cell Prefab
If Auto Cell Blocking is on, places this prefab on any cell that is not placeable below the grid. If there is a cliff face or a drop to a body of water, this would place the prefab there. In most cases, this would be left clear.
This prefab will only be available if the Grid Type is set to Points. This will be place on every grid Point not every cell.