Sensitive and Smooth are different in the way they deal with colours. Whilst one processes colour information in RGB, the other processes it in YUV.
Without getting into too much detail, this directly affects the result you obtain form your scan.
Sensitive: Used for objects which have colours that cause the laser to not be clearly visible as it sweeps across the object. This includes colours such as black, red and blue.
Smooth: Used for scans where colour information is not vital and objects where the laser is clearly visible on the object.
In the scan above, Sensitive is used that the object is dark and laser is not as clearly visible as it sweeps across the object.
Hope that helps!