The Mark Duplicates in List command in the List menu applies the same process used by the Find Duplicate Files... command, but restricts it to files currently in the file list, after first removing any folders and disks from the list.
Files without duplicates in the list are not removed (they keep their icons and are moved down to the bottom of the list). To remove them, use the Remove Non-Duplicates command in the List menu. Mark Duplicates lets you use the Find command to put a specific set of items in the file list to compare for duplicates. Examples would be applications (type 'APPL'), HyperCard stacks (type 'STAK'), or all files associated with a certain project (based on label, date range, etc.).
