The hot deployment separates your compiled classes into these ones which are hot deployed (and loaded by the sub-classloader of the webapp-classloader) and these ones which are not hot deployed (and loaded by the webapp-classloader).
In many cases it is an annoying task to define all the packages/files that are deployed as a "positive list" - but it is much easier to do a definition like: "take all theses ones - and exclude some of them". And this is the purpose of the "exclude list".
A valid scenario is to define: Use "All packages" in the positive list (the "left list") and to list theses packages/files that are not hot deployed on the "exclude list" (the "right list").
Please pay attention: the "exclude list" refers to the definition of the positive list - it is an extension of this list. You may compare with ANT-scripts in which you also define so called file-sets by "include" and "exclude" definitions.