The purpose of the interlocks is that the motor can only be energized either in the forward direction or only energized in the reverse direction at any given time. Actually the schematic shown is not a functional circuit. When the forward button is pressed, the M1 contactor (relay) is energized causing the normally open contact to latch (seal) the circuit. With M1 energized, the normally closed M1 contact opens and inhibits M2 from being energized. What turns off M1?? The way the circuit is drawn, the only way to de-energize M1 is to have the overload (O/L) contact open. Typically there should be a normally closed "Stop Switch" in series with the interlock relay contact. This way the Stop Switch can de-energize M1 so that M2 can be energized.
Normally open contacts close when the contractor (relay) coil is energized
Normally closed contacts open when the contactor (relay) coil is energized.
Hope this helps!