"Home subdirectory" examples?

SYSTEM INFORMATION
OS type and version AlmaLinux 9.2
Virtualmin version 7.7 Pro

In “Virtualmin > System Settings > Virtualmin Configuration > Defaults for new domains,” there is a setting “Home subdirectory” where you can choose automatic of “From template” that allow you to use $USER and $DOM. I was hoping someone could give some examples of when this is used and would it be a full path or just added to the “Home directory base?”

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