I found a good explanation about the Sofware flow offloading.
If you enable software flow offloading then you cannot use QoS and SQM. If it is disabled you can use them. That's because "software flow offloading" means that the traffic is bypassing some of the advanced firewall features used by QoS and SQM to prioritize traffic. It's meant to provide an "alternative" to the "hardware accelerated NAT" features offered in stock firmware that can't usually be done in OpenWrt. It's not as good as HW NAT, but it's at least halfway there