The states are intentionally open-ended so that they can be used in any number of workflows.
Rejected is typically used to mark submissions that should not be part of analysis. In some projects, those might be test submissions. In others, those might be submissions from participants eventually deemed ineligible.
Has issues is typically used to mark submissions that need some additional discussion with a data collector. For now, this needs to happen out of ODK. Common workflows we see involve giving the data collector a direct call, sending WhatsApp messages, or consulting with someone else who may be able to address the issues identified.
We know there's a desire to give data collectors a way to update submissions (and this came up briefly in learnings from form finalization research). We don't have immediate plans to take it on but it is something we have done some exploration around.