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I assume you refer to foldback current limit.
It is a way of changing the current limit of a regulator, based on the output voltage. Thus, the current limit is higher if the output voltage is higher and vic-versa.
In linear regulators this has the advantage of keeping a low power dissipation in the pass transistor under short-circuit conditions. That is because under short-circuit conditions the entire input voltage is found across the pass transistor. If you require it to also deliver the masimum current, the the power dissipation is very high. Therefore, when the output voltage gets lower (and voltage across the pass transistor higher), the output current limit is reduced.
Lokk at the picture. In the foldback case the short-circuit current is lower and only when the regulato operates at nominal voltage is the full current available.
Generally,foldback is used to limit current. In a simplest word, the advantage of foldback not only make output current lower but also make output volytage lower!
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