Galvan and Vonk's finding suggests that cats are more in tune with human emotions than we thought.
That does not mean they feel empathy. It's more likely that the cats had learned to associate their owners' smiles with rewards: people are more likely to spoil a cat when they are in a good mood.
Still, even if cats do not truly understand our moods, the study still suggests that they can pick up on surprisingly nuanced human gestures.
It also suggests something more basic: they are interested in us.