It means how smooth the transition or movement you see of the object on the screen. The higher the response time, the more frame it generates per second. Correct me if I'm wrong.
If you enabled v-sync in your game settings, the MOST you can get is 40 fps, since your screen response time 40hz. You CAN'T go beyond it.
So assuming you got a high end GPU (gtx980m), when v-sync is on, you still get 40 fps.
Note that some game if you didn't on v-sync, you may see screen tearing.

I personally won't get an laptop with poor display, especially it is 40hz. The minimum should be 60hz for me.

You still can use an external monitor though, so you can still get 60hz on 1080p, but only 30hz on 4k due to hdmi 1.4 only support 30hz on 4k.

Okay noted, new knowledge for me today. Can you give me some example of game capped at 30 fps ?
So far the game I played with v-sync on all capped at 60fps (my screen response time).
Didn't encountered 30 or less.
But to tell the truth, 30fps and 60fps has quite a significant differences to me, you can clearly see the different in smoothness with these 2 different fps.