It's a feature within Sifter. Here's a few blog posts that go over the details.

http://journal.sifterapp.com/blog/2007/08/bug-issue-tracking...

http://journal.sifterapp.com/blog/2007/08/tracker-status-com...

http://journal.sifterapp.com/blog/2011/07/resolved-vs-closed...

My guess is that since Sifter is a bug-tracking app, "no custom statuses" means a user can't provide a custom status for a particular bug--only pre-set options like "Open", "Assigned", "Resolved", etc.