A reference mesh is the model you want to retopologize. If you don't set a reference mesh, the Quad Draw tool automatically snaps to the grid.
To set a reference mesh
smooth mesh preview mesh.
If multiple objects are live, all of the objects act as a reference mesh and Quad Draw can be used on any live object.
in the
Status Line.
The mesh(es) becomes live, and the Quad Draw tool can snap to its surface.
The reference mesh becomes transparent, making new topology easier to see.