This leg determination type works in exactly the same way as in Category 1: According to the Itinerary.

Here, however, the preliminary leg shipping type and the subsequent leg shipping type (that you can maintain in the shipment header) are taken into account. These shipping types are used for the preliminary and subsequent legs that are created.

You can use this to hide subsequent legs by not maintaining the shipping type for the subsequent leg. This is helpful if you are only responsible for transportation up to a certain point and not all the way to the ship-to party location.