You might want to exempt a User from an Activity if they have been registered to a course but they do not need to actually complete the Activity. For example, if they have already completed a previous instance of the course so they do not need to complete the new one.
Once the User has been exempted, it will show as 'Exempt' on their training plan, but will show as 'Completed' in Reports therefore you may wish to add 'Is Exempt' field if you run a report with exempted Users.
Depending on the CPD Scheme that a User is set too, they may still be able to earn CPD towards exempt activities.
If on a Time Spent Scheme, they can still open the activity and gain the time spent in it towards their CPD log.
If on an Hours or Value Scheme, the User will not gain any CPD towards an exempt activity even if they open it after the exemption.