You're thinking it's legato(smooth), as there's a slur between the notes on the G on the top string. It's actually a tie, as usually you can't slur two notes that are the same. The tie it there because the note at the beginning of the second bar is 'pushed' - it gets played a little before the first beat, and is held on until the next note (not shown) is played. So simply hold it down on the 3rd fret, and play whatever comes next after it.
The D on the 2nd string stops at the end of the bar, and the open D gets played while the top G is still sounding.
This is good tab, as it actually shows timing along with where the notes are fretted.