Smart Mute is a new feature in Gmail Labs that helps you silence email threads that "just won't die". It's similar to Gmail's existing mute feature, but it's better at quieting unwanted email threads that aren't actually spam.
You know the [emails]I'm talking about: those emails with 10+ people cc'd where everyone replies all, but you lost interest five emails ago. The current mute behaviour doesn't do well in these situations since the messages are addressed to you. You end up with muted messages in your inbox, and the only way to prevent these emails from coming back to your inbox has been to create a custom filter for a specific conversation.
If you enable "Smart Mute" from the Labs tab in Gmail Settings, muted conversations will only appear in your inbox if a new message in the conversation is addressed to you and no one else, or a new email in the conversation adds you to the "To" or "Cc" line. Once you enable Smart Mute, mute behaviour will change across all versions of Gmail: web, mobile, Android, etc.
The other small tweak to mute in Gmail takes effect whether or not your enable Smart Mute: You can now unmute messages either from the More actions drop-down (accessible from the keyboard by pressing '.' [period] ) or by removing the Muted label when you're viewing a muted message—the same way you'd remove any other label.
New in Labs: Smart mute and easier ways to unmute [Official Gmail Blog]