body_entered is a signal emitted by the node, it's not a function, so just putting a function with that name isn't going to accomplish anything.
Signals are used by connecting them to functions. These functions can reside on the emitting node or on any other node in the tree. When a signal is emitted, the connected function receives it. There may even be multiple nodes subscribed to a given node's signal
To connect a signal, you can either in the Inspector, as you've done, or you can do it in code:
connect("body_entered", self, "_on_body_entered")
print("Something entered me.")
For more information, see Signals in the Step-by-step docs.