it means ONLY one byte will be allocated per character - so if you're using multi-byte charsets, your 1 character won't fit
if you know you have to have at least room enough for 1 character, don't use the BYTE syntax unless you know exactly how much room you'll need to store that byte
when in doubt, use VARCHAR2(1 CHAR)
same thing answered here Difference between BYTE and CHAR in column datatypes
Also, in 12c the max for varchar2 is now 32k, not 4000. If you need more than that, use CLOB
in Oracle, don't use VARCHAR