Understanding Two MOSFET with sources connected

The below assumes NMOS, just for simplicity. Also note that I'm describing which directions current can flow, not which way it will flow. Which way it will flow depends on the voltages the circuit is connected to.

A single MOSFET has two states: ON and OFF.

ON: current can flow both directions

OFF: current can flow one direction (source-drain, due to the body diode) and not the other direction (drain-source, because the FET is off)

A single MOSFET in series with a diode:

also has two states, ON and OFF.

ON: current flows one direction (drain-source, through the FET and the second diode), but not the other direction (source-drain, because the second diode is pointing the wrong way)

OFF: current won't flow either way, because whichever way you look there's a diode opposing the flow of current.

Two MOSFETs in series, pointing opposite directions:

have four possible states. ON-ON, ON-OFF, OFF-ON, and OFF-OFF. For this example, I'll describe current flow with directions as seen in the picture above.

ON-ON: current can flow both directions through the circuit.

ON-OFF: current can flow from left to right (through the left FET and the right diode) but not from right to left (because of the right diode)

OFF-ON: current can flow from right to left (through the right FET and the left diode) but not from left to right (because of the left diode)

OFF-OFF: current can not flow in either direction, because with both FETs off all you have is two diodes blocking current flow in either direction.

So the third topology has the option of either blocking currents in both directions, or allowing current flow in either direction, depending on how it's gated.