The hot wallet needs to store an encrypted token authenticated via BitID by the cold to the HDM server to ask the server to cosign.
'Reset HDM Server Authentication' will ask cold wallet to authenticate a new token, and revoke the old one.
Usually you don't need to manually use this function. This is only useful when you try to use your hot wallet to send transactions if you has tried the recovery of your HDM account and yet you still have your original hot wallet in your hand. The recovery will revoke the token on the original hot wallet. Therefore the hot wallet needs a reset of the authentication.