You're interpreting the "Advanced Security Settings for ballardc" dialog improperly.
The "Include inheritable permissions from this object's parent" is a setting that applies to the "ballardc" object, not to the individual access control entry (ACE) that you've highlighted in the view of the access control list (ACL). The "ballardc" object is inheriting any inheritable ACEs from its parent container (the OU or container object in the Active Directory (AD) where it's located).
Edit:
I see your comment to @john above, and in light of that:
By default all newly-created user objects in the AD inherit permissions from their parents. If somebody has gone and changed that on all the user objects then there is likely some reason. I'd be wary of just turning inheritance back on without understanding why first.