What's the third footprint pad on some SMD LEDs for?

The shown pads are the area you need for soldering. The pads don't have to be exactly that size, but the openings in the soldermask should have the given sizes and positions.

The "third pad" on many LEDs is so that you can connect the LED to a large surface for cooling - you use a copper area on your PCB as a heat sink.

Whether the third pin may be connected to ground or not depends on how it is connected inside the LED. You must check the datasheet. In some LEDs, the thermal pin is connected to the cathode - you can connect it to ground if the cathode is grounded. In other LEDs, the thermal pin is electrically neutral (not connected electrically) so you can connect the thermal pin to any convenient large copper area.

In the case of your VSMG10850, the third pin is given as "reinforcing pin," which I take to mean it is mechanical only. The datasheet says it is "non-electrode" so it has no electrical connection. As it is mechanical only, it won't work as a heat sink so there's no advantage to connecting it to a large copper area.

Relevant section of the datasheet:

The datasheet says it is a reinforcing pin. So it is just a extra mounting pad for soldering the LED so it does not fall off from mechanical stress so easily.