What are the bars at the limbs telling me in VATS?

These bars indicate the health of that target able section. If you were to reduce one or more of the legs to an empty bar, for example, the enemy would start limping along. This is especially useful on larger enemies. You're also able to neutralize certain abilities in this manner - if for example you were to destroy the rad scorpion's stinger or shoot off the arm carrying the weapon on a humanoid foe...