Custom bug statuses are for creating a customized bug workflow specific to the project. Project Owners and users with permissions to configure project settings can create custom bug statuses.
Navigate to the Settings primary tab, and then to the Bug Statuses secondary tab. Click the Add Custom Status button, and enter in a name and map it to a system default bug status. To make a custom bug status usable within the project, the check box for it must be checked and it must be associated with a Bug Type that has been added to the project.