The court was particularly clear on rejecting the nine-dash line and China's claims of historic waters.
As much as China will say it ignores this ruling, it absolutely puts pressure on China and constricts the language it will be able to use when discussing disputes in the South China Sea. China has particularly relied on claims of historic waters, which will diplomatically make for some extremely awkward press statements for China now.
This may force China into some face-saving agreements, so that it continues to appear strong at home where it has made this into an issue of nationalism, but internationally may try to consolidate what it does hold.
Another likely option is China may try to create a ADIZ over the South China Sea like it did in the East China Sea (and use its somewhat perverted interpretation of when an ADIZ applies), with the idea that if its interests in the sea have been denied, it can try to control the air.
I expect freedom of navigation transits may increase now and with greater certainty, both from the US and from other countries including Japan and Australia, now that we know what features are entitled to a 12-mile territorial sea and which ones are not (due to being submerged at high tide).
I'm optimistic after some initial saber rattling that this may actually lead to a reduction in tensions in the South China Sea, but that is mostly up to China now at this point.