Those are for when the ship is at a distance, yes. SFC2/OP can support up to 3 different LOD models for various ranges - the model's mesh, though, must include essentially 3 different copies of the same ship. Since the game can use these models at extreme ranges, the designers took advantage of this fact and did 3 different models at descending polygon counts and smaller and smaller textures.
Honestly, though, this isn't a big enough savings to be worth it, IMHO. Trippling the amount of work a modeller has to do to support older video cards is well and good for Taldren to do, but I never bother. Indeed, on most the kitbhashes I do, if there is multiple LOD models in the mesh, I just delete them and use the highest quality one. The poly count really isn't that different - it will never make a difference (at least, not anymore).