It defines the upper acceptable bound for this intermediate form of gouge avoidance. If gouges greater than this value are detected then the tool is lifted axially to avoid the gouge.
This value can therefore be used to control the location and amount of material left on non-swarfable surfaces. For example, if material on a surface can mostly be machined by swarf machining, but there is a region where 3 mm of material could be left, then you can either: