I just released my game The Cluster yesterday, meaning:
I removed the "Disable new downloads & purchases" checkmark.
I changed the release status from "In development" to "Released".
The term released is not used in that meaning on Itch. Itch is a self publishing site.
Either you have published it, or you have not. The quality "released" has no meaning at all. Other than giving a declaration of intention about updates and for filtering browse results.
This is how I understand the situation. Opinions might differ.
I see people "releasing" their half finished prototype and checking the released option, because, they ,well, "released" it to the public.
You can even "release" a project as "on hold". How does that work? It does not, of course. As I said, it is just a declaration of intention about how you will update the project.