It is useful to see what content has been changed/added since the user's last visit. Returning visitors of your community see updated (unread) items in your community automatically. On the default template the items (lessons, articles and so on) are marked with a big circle to indicate the content is unread.
FX Pages goes further and shows registered users what content has been changed or new to them.
The badges help to differ what is new and what is updated.
While FX Pages uses "unread" logic of Invision Community, it would not be helpful to mark any unread item as "New". If a user registers on the site and login at the first time, all items are unread for him. But does it make sense to mark all the items with New, even those that has been created years ago?
The badge New! is only attached to the title, if the record has been created within the last 7 days. The items are still shown as unread (the circle before the title).
The badge Updated! is shown, if the item has been updated since last read. Unread means also, there can be just new comments to the record. If you would like to restrict the badge to the content changes only (and not comments), you can change a setting for the last action in your database.
If you do not allow comments on your database at all, then only content changes are tracked.