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Hi Mike -
Let's say you have a SW Part datacard that uses a serial number to generate the number for the datacard variable Number. If you also have the Number variable set up to read the value of a file property from the SW Part file then you could clear the Default overwrites checkbox to read the value from the file if it exisits.
If you check the 'Default overwrites' checkbox, then the serial number will generate a new number and write it back to the file property which overwrites the property in the file.
With the checkbox "checked", it will ignore the custom property value in the file and overwrite it with the default in the card? That's easier to understand than the manual.