Falloffs serve a variety of functions related to deforming items and meshes. You apply falloffs to the target based on their intended function.
You can use falloffs to attenuate the effects of deformers on a mesh (much like modeling falloffs do for tools). You can use them as deformers to define an area of influence that then modulates the surface based on the falloff's shape and size. Additionally, you can use them to limit how global forces act upon dynamic items in a dynamic simulation to influence particle simulations.
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