The Smooth Shift tool is a deformation tool that smooths out sharp edges in polygonal geometry based on a smoothing angle. When the angle between polygons is greater than the assigned smoothing angle, Modo replaces the edge with two edges that are scaled and offset to round the sharp corners of the mesh. You can use its two handles in the viewport to control individually the offset and scale.
The Smooth Shift tool is on the Polygon tab of the Modo Tools toolbar in the Tools group. You can access this tool also by choosing Geometry > Polygon > Smooth Shift.
You can use the Smooth Shift tool interactively in the 3D Viewport, or you can adjust options in the tool's Properties panel and then click Apply.