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One of the first things you should learn how to do is to control the Selection tool. I know it sounds like a basic tool, and it is, but it is also very useful and has a lot of subtlety.
The third mode allows interactive rescaling (reshaping) on all objects. This is not the normal way that I use this tool. The reason I don’t tend to use the tool this way is that it allows you to Reshape all these selected objects. Sometimes, you might want to move the objects but with this mode you can accidentally end up reshaping them.