No. It means you can disable password authentication and use only key-based authentication instead. This way someone trying to connect will not even get a password prompt to try to brute-force unless they have a known key.
Edit: sorry I missed this line:
# To disable tunneled clear text passwords, change to no here!
I have no idea why that is in your sshd_config. ssh does _not_ send passwords in plain text. That is the whole point of ssh, to replace old-school programs like rsh that do...