This Shloka is in reference to Asachudras and others. They too have the right to serve God but in their case they should not mark the vertical Tilak. They should wear only the Chandlo. All, regardless of their birth have a right to serve and worship the Lord. Even the worst of sinners are cleansed through the worship of God. Asachudras do not have the right of Poojan of Murtis, but do have the right of Darshan and Naamasankirtan and therefore need not wear the vertical Tilak.
Brahman Purana explains, ‘Yagna, donation, penance, offerings, study and ancestral rites performed without the Urdvapundra bear no fruits.’ Shudras do not have the right to perform any of these acts therefore it is not necessary for them to wear the Urdvapundra.
The Lord in this way gives the true Vedic teachings for Shudras explaining their rights and duties. A Shudra can never be called an ‘untouchable’ if he is a faithful devotee of God. Those, regardless of caste who act wilfully, breaking the ‘Panchvratmans’ are considered the true untouchables.
Now the Lord explains Shiva Mahima: