When sequential format is selected in the JQL section pop-up, a layout section appears that is specific to the this format.
Desired layout needs to be ‘designed’ within this area. Here, the ‘design’ is simply a sequence of available variables. These variables are displayed based on what fields you have chosen on the second tab.
Any fields that you have selected to be used, can be arranged in any order you wish. For every field that is configured under 'FIELDS' section on the left, there will be two variables on the right. One that will fetch the field value & other to fetch its display label. e.g. for Priority field there are two variables - {priority} & {priorityLabel}.
Required condition is, you have to add fields & their configurations before they can be used in the Layout section. The layout created will be repeated for every issue that is returned by your section JQL. For example, layout in the above screenshot will generate data that looks like below screenshot.
If you are using Priority, Status, Issue type in your layout - the generated email/pdf could be a bit mis-aligned because these issue fields are images.
To avoid this, modify the field configuration for these fields - and check the box 'display as text'.