NoDisplay means "this application exists, but don't display it in the menus". This can be useful to e.g. associate this application with MIME types, so that it gets launched from a file manager (or other apps), without having a menu entry for it (there are tons of good reasons for this, including e.g. the netscape -remote, or kfmclient openURL kind of stuff).
NoDisplay specify to ignore desktop files with no Display in menus. It specifically states that mimetype are a case where an app might be associated with one, but not shown in the menus.
Shortcuts should be treated the same as mimetype association.
To allow cases such as Krunner, where the app won't be in the menu but still needs shortcuts.