If you view the VI help you can find the following explanation:
threshold rejects peaks and valleys that are too small. For peaks, the VI ignores any peak found with a fitted amplitude that is less than threshold. The VI ignores valleys if the fitted trough is greater than threshold.
width specifies the number of consecutive data points to use in the quadratic least squares fit. width is coerced to a value greater than or equal to 3. The value should be no more than about 1/2 of the half-width of the peaks/valleys and can be much smaller (but >2) for noise-free data. Large widths can reduce the apparent amplitude of peaks and shift the apparent location. For noisy data, this modification is unimportant since the noise obscures the actual peak.