Well, I finally looked it up today and it has a VERY useful purpose! As you know, in KNK Studio, you can create an outline (shadow mat) using Tranform>Outline. Up on the Smart Bar, you will find an icon on the far right which you can indent for masking or outdent to leave off. Masking, in essence, is used for creating a single welding outline when there is more than one image selected. With the Masking off, the outlines will remain individual. That’s it!
Lynn G reported another related discovery this morning: if you initially have only selected one object for the Transform>Outline but then click on other images, the outline will be applied to each one.