It will allow any user account on your system to enter the given directory and list its contents, including other users of your Mac, including the Guest account, if activated.
It will not affect your files through data modification or destruction, and by itself does not give permissions to read the files. But since default file access permissions allow reading everything and entering directories for all users unless you specifically prevent it, they can be read and copied. (That's also good to know for new top-level directories in
~, they're accessible to everyone on OS X by default!)
Some programs use special unprivileged user accounts as a security measure. By doing this, you'll probably circumvent the protection inherent in this.
Unless you hit buggy software (which for desktop and laptop computers is far more likely to be user software running under your user) or share much of your home directory or file system through other means, it won't be a real issue.
Regarding those instructions, they're probably too permissive.
It should suffice to make all directories on the path to e.g.
~/Documents/test executable. That's why you can enter other users' home directories; otherwise you wouldn't get to
chmod a+x ~/Documents (any user can enter the directory) and
chmod a+rx ~/Documents/test (other all users can enter and read the actual directory you want to make accessible via Apache) and see whether that works.