Phases in a proposal are discrete stages in the delivery cycle such as development, implementation, test etc. Phases are normally associated with distinct blocks of time, but can also be broken down based on the type or kind of deliverable (product, service, support etc.). 

Some clients (or capital project requests) might ask for base deliverables and then optional Sets of deliverables for example for additional contract or program-years, or perhaps different lot-sizes or end item quantities. 

Phases or Sets cover both use-cases above (they are almost never required together). Phases/Sets is not normally needed for smaller projects, but for larger programs they represent the highest level of break-down of your proposal, over and above the proposal WBS cost breakdown or the priced line items or CLINS.

To start, select whether your proposal has one or multiple phases in the SETUP tab. Selecting multiple makes the PHASES/SETS tab appear.

Proposal WBS elements and priced line items are each assigned to one phase, WBS/priced lines cannot be "shared" across several phases. If you find yourself wanting to share WBS or line items across phases then either reconfigure your phases to a higher level, or share lower level WBS elements between phases instead and leave the phase assignment blank for the higher level WBS.

Phases or Sets can be optional as explained here.