"Untrusted" in this context means you don't trust the connection. SSH will use additional security measures to try to make X11 forwarding safer.
"Trusted" means you are entirely confident that no on on the remote host will get access to your Xauth data and use it to monitor your keystrokes for instance.
This terminology actually confused me for years. I thought "Trusted" connections were safer. But actually it's an option you're supposed to use in situations where the connection IS trustworthy and you want to run stuff without extra security measures getting in your way. "Untrusted" is the one that makes it (somewhat) safer to deal with an untrusted remote host.
An "Untrusted" connection attempts to limit what a black hat could do to you by engaging the X11 security extension and disabling other extensions that you (hopefully) don't need. This is probably why RandR is disabled with -X. Do you need to be able to rotate your X display from the remote host?
It's also important to note that "untrusted" X11 forwarding turns off after a certain amount of time to keep you from accidentally leaving it on. New attempts to open windows will just fail after that. That bit me several times before I read enough docs to understand what was happening.