The save directory starts as None in the template, which means that Ren'Py will only save files inside the base game folder (and doesn't make an additional, "special" backup in AppData or similar - depends on the OS). You should give it a unique name so it can make that extra backup folder - typically, Ren'Py auto-generates this, but since this is a template, I can't auto-generate them for each new person who downloads it. So it's up to you to fill something out there.
The name itself just has to be a string, but keep in mind it has to be unique, and probably shouldn't contain spaces or special characters to avoid problems. A typical save directory name, as noted in the comment above that config value, is something like "FreshProject-4689753165" (quotes included, it's a string). FreshProject is probably the name of your game - BaldursGate or ANightInTheWoods or whatever - and then the numbers can honestly be whatever; by default they're generated from the timestamp the project was created at so it's unique, but you'll have a fairly equal amount of making a unique name by just smashing together however many numbers you want.
This name isn't really visible to the player! It's just a special folder for saves and persistent info - they can find it if they need to, but it mostly exists behind the scenes as a backup for their saves. Basic rule is to use the name of your game with no spaces or special characters (so no &, exclamation marks, periods, etc), and then do a dash and just keysmash some numbers to the end of it. Once you've set it you should generally not change it. Hope that helps answer your question!