“Guaranteed” means that it definitely will happen. However, the damage isn’t guaranteed. People would be very upset if they took what was a “guaranteed” shot and missed. People get salty enough when they miss a 95% chance shot.
“Likely” means that something has more chance of happening that not happening.
“Possible” means something could happen, but doesn’t really indicate the chance of it happening.
As for the circles, they represent the cone of fire. All shots land inside the red circle. So, if you’re close enough that the red circle is completely covering your target with no gaps, then the hit will be guaranteed (that still doesn’t mean guaranteed damage though, as armor can negate it). Only around 50% of the shots will land inside the smaller yellow circle.