Height

This specifies the minimum and maximum height requirements to plant the biome. There are two modes:

✓ Around Water

In this case, the Minimum Height references the depth below water above which the biome will be planted. The maximum height is the maximum distance above the water level where the biome will be placed. So if we're depositing clay using the settings on the right, clay can be placed between 20 dirt levels below water, up to a maximum of 30 above the water line, whatever that may be.

Not Around Water

If the Around Water box is not checked, the Minimum Height and Maximum Height are both relative to the ocean floor. So for seeding or painting Cedar Tree biomes with the settings on the left, assuming the water level is 500, the trees may be planted from 300 to 1000 levels above the water line.

These restrictions appear to be enforced during the growth process as well as the initial seeding, so you can see biomes respecting contour lines in some situations.