If directConnect flag returns true then it will execute the tests without using the selenium server. Where selenium server means a setup similar to Selenium Grid. Running tests using Selenium Server allows us to run tests on the remote machine or on the local machine and provides an option to distribute execution load among different nodes. It is also possible to run ta est on multiple browsers at the same time using the selenium server.
While directConnect false will run test only on your local installation of FireFox and Chrome. It will run the test on the same machine where test codebase exists.