Quoting Neil Banfield from the above link, "Combined taskbar buttons use the app/shortcut icon. Uncombined uses the window icon which is a different thing."
From the linked thread:
Here are examples; the same apps and folders are open in each example.
Always combine taskbar buttons will use generic Explorer icons, and any custom app icons you are using. (below)

Never combine with Always hide text will use custom Explorer icons, but will use generic app icons. (below)

As you can see in the examples, the Explorer folders are combined in the first example, and then not combined in the second example. Only the text has been removed. I really like this mode because Explorer folders are not combined, but it's a non-starter because my custom app icons are not used for apps.
Hopes this helps.