Public means that anyone can access it without any verification/authentication info. Private in this context would mean that it's limited to people who received the link.
Re:Ask HN: Dropbox security bug?
by chris_dcosta on Wednesday October 24, 2012 @04:23AM
(#4692124)
Yep - but I challenge you to determine that from the sharing dialogue.
It seems to undermine the idea of security. I'd rather have that functionality limited in someway that makes it clear that you are making the folder "public" and no longer private.