The prepaid gratuities on a cruise ship is basically money that you prepay when you sign up for your cruise and pay the fare for the cruise.
That prepaid money that you prepay when you pay for your cruise ship ticket is used as tips that are paid to waiters and other staff on board the ship that help you and serve you.
You can choose to prepay the gratuities on the cruise ship so that you don't need to pay tips when you are served or you can wait to pay the tips when the waiters and other staff serve you.
I chose to pay a prepaid gratuities so I would not have to tip every time but I still tipped a really good waiter or other staff in cash when they were doing a wonderful job.
Those cruise ship employees are doings lots of work but are not getting paid all that much and to me it's worth it to tip them at the times I go on cruise ships to have fun.