I'm happy to help you out with this and to assure you ... you're not alone in your confusion.
Short answer here is all three are UNNECESSARY for our controller. This should make you life a bit easier.
It appears your current (Hunter Pro-C) timer required a hard-wired power source. That's what the AC1 & AC2 are for. It would be a good idea to cut all power to the unit - from the breaker - before disconnect. Insulate those wires in case they ever go "hot" and set aside. For our controllers, power is provided from a wall outlet and is plugged directly into the unit:
The REM wire is for a remote. Also unnecessary, as you'll be controlling your new Gen2 from our app!
Speaking of the app - since it appears you have a Master Valve (or Pump), remember to enable that setting when you configure your new controller (From the Dashboard screen > Device Settings > Advanced > Master Valve Toggle)
Happy installing, and feel free to reach out with any further questions.