In the context of defining a sketch, a reference plane simply orients lte sketch.
You have provided a "face plane" with the 1st selection. Now it has to decide what rotational orientation you wish. So the 2nd selection is a plane which wil decide the vertical or horizontal orientation -and- the side the positive normal of the plane will face; up/down or left/right.
Please think of this as constraining the degrees of freedom to none.