What does this traffic sign indicate?

You are correct. This traffic sign warns of a junction with a side road ahead and specifically refers to the next crossroads or junction only, not all intersections or up to the town limit. In practice, when you see this sign, be especially alert for cross traffic or vehicles entering from the side only at the next junction. This helps you anticipate possible hazards just before reaching that specific intersection. Remember that this is a warning sign, not a continuing instruction for the entire road segment.