Anybody: This is the default audience requirement setting. Anybody means anyone present on the Stage where the Event occurs. Use this setting when it doesn't matter who is present. All Actors present witness the Event.
Subject Only: Use this when the Subject is up to something that he doesn't want anybody else to know about. For example, he's engaging in shameful solitary sexual practices, or preparing the equipment for a crime, or doing something stupid. If your Verb demands privacy for the Subject, then use the "Subject Only" Audience setting.
Subject & DirObject Only: Use this Audience setting when Subject and DirObject must both be present, and nobody else. For example, you might want to use this for Verbs of an intimate romantic or sexual nature.
All Involved: Every Actor involved in the Event must be present. This would apply to any additional Actor WordSockets. You might use this for a Verb such as "counsel antagonists" wherein the Subject admonishes two other people to kiss and make up. Obviously, this Verb won't work if one of those people is missing.
Everybody: This applies to an Event so sensational that everybody is instantly aware of the Event. The grapevine spreads the word spontaneously. Think of how everybody in America knew about 9/11 almost immediately. When you use this Audience setting, everybody witnesses and reacts to it immediately, regardless of their locations.
Mental State: the Subject is thinking about something, making a decision. Although other Actors may be on the same Stage, they are unaware of Subject's action.
Cheek by Jowl: the Subject and DirObject are leaning close together, whispering to each other. Other Actors on the same Stage are unaware of this Event.
Under the Hood: nobody witnesses, and Event does not go into HistoryBook. You should only use Fate as the Subject of an Under the Hood Verb.