'Forward on busy' redirects your calls when your phone is not able to present you with any more alerting calls.

By default, this function is only applied to incoming external calls made to you. However, if required, internal calls can also be selected.
When enabled, all calls matching the settings are forwarded to the number set as the 'forward on busy'/'no answer' destination. That number can be internal or external.
'Busy' is defined has having no available call appearance buttons on which further calls can be presented.
Hunt group calls are not presented when you are busy and so are not forwarded by this setting.
The 'forward on busy' and 'forward on no answer' options use the same forwarding destination number. If no number is set, they use the same destination as set for 'forward unconditional.'
If you also have voicemail enabled, if the the forwarded call is still unanswered after having rung for your no answer time (default 15 seconds), the system will redirect the call to voicemail. Note that this is not always possible for calls that have been forwarded to an external number.