You have to keep in mind that some boards allow guests to post threads and replies, so selecting this option will toggle the captcha on and off for those guests that are posting replies and threads in addition to registration. There are also other features a guest may use such as the contact form.
Enable CAPTCHA for Registration would be incorrect.
The setting you mention enables CAPTCHA for Guests upon actions that require CAPTCHA authorisation - this isn't limited to registration. If you allow guests to post on your forum, they have to fill in a CAPTCHA if the CAPTCHA for Guests option is enabled. There are other actions too, therefore, the wording needs to stay the same.