This is used to identify if this ScreenGroup is a "virtual" group. Virtual groups are used in the identification of screens, but not in the naming of them. By providing the virtual attribute, the screen definitions compiler enables the "late optimization" of screen recognition, without impacting existing applications that were written with unqualified names.
For example in the above Name Entry Field description there is a screen with the fully qualfied name of "Welcome.Errors.BadID". In the case where the ScreenGroup element "Errors" was not initially present in the definition, application logic may be expecting a screen named "Welcome.BadID". By inserting the "Errors" ScreenGroup element as a virtual element, the fully qualfied name of the BadID screen will remain "Welcome.BadID" while the recognition of the group of screens that represent errors could be made more efficient through the "Errors" ScreenGroup.