As above it means it's being moved. Essentially it has a motion sensor built in so that if it's not being moved it isn't broadcasting so it wouldn't open the car and so relay attacks can't be used to open the car by thieves. That's what I understand it to be for anyway.
Prior to 2.1, my fob used to start flashing when I got within 8 metres of the car - slowly at first, then more flashes as you got closer. I assume because it got into range of the more distant door transceivers.
Since 2.1, I think sensitivity has been reduced, and I only see flashing start around 3-4 metres away. Now, I can't get the LED to flash from inside the house (or start the headlight animation).
The car still only actually opens when the fob is very close to the door in use, mind. Less than a metre.