I selected that option, closed Mousepad, restarted my laptop. When I re-opened Mousepad, I haven’t noticed any difference in how its window is rendered.
What does the Client-side decorations option exactly do?
In layman terms, with it, some applications that had that thinner title bar, with only close, maximize, minimize buttons, now will have the HeaderBar version, a bit larger, with some of the GTK+ features into it, like the hamburger menu …
For Mousepad, the only difference I noticed is that the title bar background for the inactive windows uses a different color respect other windows, for example Thunar windows.