All bettas have beards.. females are small, the males are bigger..
Basically they are to make them look larger and meaner when they see other bettas.. either like a peacock trying to get a mate, or another male who is stepping in his territory. Basically it's using psychological warfare, and hoping that the "bigger size" he "is" will be enough to ward off attackers, or impress a mate.
They will use their fins the same way- spreading them out big... combined with the beard and their fins open it is called flaring.
When the gill covers are closed, you may see a tiny bit of the beard (as you are seeing- the bump on the chin), but not until they open will you see the whole thing. Placing a mirror or another betta (in a separate tank) next to his tank will have them flaring, which a few minutes a day is actually healthy for them..