The three inventory types
Maximum serves across all available inventory, subject to Google's content policies, with highly sensitive content excluded automatically. Moderate additionally excludes strong profanity, dramatized violence and sexually suggestive themes. Limited goes furthest, excluding moderate profanity and sexually suggestive themes even inside mainstream content like music videos. Google renamed Expanded to Maximum and Standard to Moderate; the exclusions did not change with the names.
What it does and doesn't protect
The Video Ad Safety Promise applies to all three tiers, so the most controversial content is excluded regardless of setting. What you trade by tightening is reach: Google's own estimate panel shows reduced inventory, reduced impressions and an increased CPM, because a smaller pool costs more to buy. It is also a blunt instrument, and no substitute for placement exclusions and a weekly placement review. We compare the tiers in Google Ads inventory types explained.