This flag is a bit interested because its meaning changes depending on whether it is applied to a regular file or a directory.
If a user is granted execute permission to a file, it means the file can be executed. This is usually applied to binary executable files and scripts.
If a user is granted execute permission to a directory, it means the content of the directory can be accessed. This is different from being able to list the content of a directory. This point will be discussed more at length later.