The Toolbars menu item contains a submenu with commands that show or hide the respective application toolbars.
Toolbar settings take effect depending on the current comparison mode. For example, if toolbar settings are made with a File Comparison window open, the settings apply to all File Comparison windows that are currently open and that will be opened subsequently. You can restore all toolbars to their default state by running the menu command Tools | Restore Toolbars and Windows.
The Customize submenu item is a shortcut for the Tools | Customize... command.