If you enable the first one but disable/do not configure the second one there will not be any recent items in Start menu though the recently opened documents list is being saved. If you want to see the list of recent items from start menu, then you need to leave these two setting either in disabled or not configured state. This one enables/disables the tracking of recently opened documents where as the above setting controls whether the list should be shown in the Start menu or not.
There is another related setting called ‘ Do not keep history of recently opened documents‘.
This policy setting can be found under the node ‘ User Configuration -> Administrative templates -> Start Menu and Taskbar‘ Recent Items list can be added to/deleted from start menu by configuring the group policy ‘ Remove recent items menu from Start Menu’. Note: The below group policy settings are applicable for a Windows 7 system. Group Policy configuration for Recent Items:
But you can see items added to the list only if the second check button in the Start menu tab (i.e ‘Store and display recently opened items in the Start menu and the taskbar’ )is selected. The above step only adds Recent Items link to the start menu.