What is "Smart copy/paste?"

In Preferences, under the “Editor” category, there is an option (ticked by default) named “Smart copy/paste” in the “Editing Options” section.

What exactly is this? There’s nothing mentioned in the help utility. Thanks.

Smart copy is documented in the appendix on preferences, it states:

So in other words, it will help reduce situations where you paste in text and end up withwordsslammed together.