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The green dotted line represents how thick the border should be from the cut line. A border that is not 1/4" thick will result in uneven borders on all four sides when printed.
Borders should be at least 1/4" thick PLUS 1/8" bleed for a total size of 3/8" thick.
The cutting process for printed materials has a mechanical tolerance of about 0.0625 or 1/16 of an inch. When using a border in your artwork, it is essential that your design use at least 0.25 or 1/4 of an inch of white space from your border to the cut line to maintain a symmetric appearance.