There's some terminology and history to understand, and then it will probably make sense.
Ability Command Buttons are an adaption of API Command Buttons. API Command Buttons are a Button that executes and API Command. (I know that sounds like a tautology, but stick with me!) Buttons are basically clickable links, like urls on a website.
In Roll20, you create links in chat like this:
[some label](some url)
API Commands have the structure:
!something
An exclamation mark followed by some text (really just about anything). That command and a bunch of context is received by all the API scripts and interpreted to take some actions.
An API Command Button is basically a link where the URL portion is an API Command:
[some label](!something)
You click the label, it runs the command.
Abilities are a collection of commands that are executed in the context of a Character. The commands can be basically anything you could put in chat. Abilities are tied to a specific Character, and are (usually) found on the Attributes and Abilities tab of a Character Journal window. They can be executed either by clicking their button in that window, or by running a chat command like this:
%{some character|some-ability}
Ability Command Buttons are just like links that instead call that ability. Unlike API Commands in buttons, they have a slightly changed syntax (more on that later):
[some label](~some character|some-ability)
Clicking the button then just runs the ability.
The reason for the different syntax is that whole "usually" regarding the location of abilities. What Ability Command Buttons let you call is actually two things: Character Abilities and Character Sheet Rolls. As far as I know, you can't call Character Sheet Rolls with the %{} syntax, but it probably doesn't matter.
So, in order for an Ability Command Button to work, it needs to be referring to either an Ability or a Roll for a specific Character. If neither of those exist, it won't work. (It probably fails silently, but it might give an error) In the case of what you've posted, it's looking at the "selected" character. "selected" refers to the token you have selected on the map, and any character that it represents. That token needs to represent a character (Double click it, look at the represents field at the top left, see what character is listed. If there's None, choose one and save.), and that Character needs to either have an Ability with that name (check the Attributes and Abilities tab), or have a character sheet with a Roll by that name (that's harder to explain...).
Based on what is in your example, it's looking for a Roll on a character sheet, probably the old Community DnD5e Sheet, which you're unlikely to be using. Try making some Abilities and making Ability Command Buttons that call them for experience. Once that makes sense, you can right click a button/link on a Character Sheet and click inspect, then find the name in the HTML source. (Note that if it's a Repeating Section, like a list of spells or attacks, you have to assemble a couple different bits of data, which I don't think I can describe from memory...)
Hopefully that's enough info to get you started!