The candidate's status in Guide has important differences from their status in your ATS. The most important difference is that you typically want to first update their status in your ATS, THEN update their status in Guide alongside communications that you send.
The candidate's status in Guide…
Determines when they show up on the Candidates dashboard in Guide
Can be associated with a message that you send the candidate
Places the candidate's portal into a new visual state
The video below talks about each of the above in detail:
There are 3 Support articles (and video walkthroughs) of updating to specific statuses in Guide: