Whenever you see this box under gallery examples, there are a few things to look out for...
Copy/paste it to the Shortcode Editor first. It's always best to pass the example through that tool.
Change the content source - you most likely don't want to show "NextGEN pics with the ID 603 and 604" [...]
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Thumbnail creation is necessary for the various needs of the plugin and here you can read a full technological explanation that should cover all your concerns. Please note that you are free to disable it any time, however there would be a performance hit as the large or original images would be used as thumbnails, [...]