Literature notes are the notes you made — by adding comments, or conversation to the author, for example — when quoting/highlighting from the source while reading.
Taking an extra effort to write down some thoughts help adding more context to the highlighted/quoted text, it help provide a better understanding when you lookup the note later on.
By making notes this way, we can take note actively as we read, without waiting until finished consuming the material.
Many people takes References notes — collect notes, highlights — and make literature notes later on, I don't think this is neccessary, combine the two steps into just one is better.
Literature notes will be prefixed with § (Option + 6).