By selecting "Don't use data in Funnel", you are essentially hiding the data as well as the dimensions and metrics provided by the Data Source. This effectively prevents the Data Source from being used in the Data Explorer and your all other data destinations such Data Warehouse Exports, GA Upload etc. If you want to start using it again, simply select "Use data in Funnel".
Note that this will not make Funnel will stop downloading data, to do so you can instead use the "Disable import" option, described in this article.
Why would you want to do this? One example is if you're no longer using the data source, but you think you might start again the in future so you don't want to remove it. This makes it so that the connection is still there, the data is still coming in, but it's not being used until you would like to use it again..
Another example of why you would use this toggle, is that maybe you have connected a data source multiple times and the data is being double counted by having several connections on. In this case, you would be able to select "Don't use in Funnel" for the duplicate data sources and make sure you're not using duplicate data. To read more about this case you can read this article.
How to exclude data from Funnel
There are 3 ways to include or exclude data from data sources.
Via the actions menu. First select the sources you want to edit and then click "Don't use data in Funnel" button in the Actions menu
Via single source actions. Click the ⋮ icon on the right side of the table. there you can find a "Don't use data in Funnel" or "Use data in Funnel" button.
Via the data source details page. By clicking on the name of a data source you will be shown this page. Here the is a toggle which lets you toggle if you want to use that sources data in Funnel.
