These screenshots show how different Sharpie settings interact.
The first sample shows a Blur filter at a diameter of 3 (8 pixels) and a power of 1 (full strength). Without using threshold or limit (left image), all of the image luminance is mushed out and there's not much to see. When threshold is introduced (right), detail returns to the skin texture and jewelry, but overall luminace is still quite murky.
Bringing limit in causes the maximum amount of effect to be reduced, thus keeping murkiness under control. Notice the difference in the jewelry particularly. The image on the left has no thresholding, the image on the right has the same thresholding as the image above (0.1).
These samples illustrate the addition of local contrast -- a wide diameter 8 (256 pixels) sharpening filter at 0.5 strength. The image on the left is the raw LCE filter applied. The image on the right shows the addition of 0.2 thresholding. Thresholding removes minor effects. Limiting curtails major effects.
Now we add in limiting, this time a value of 0.8. This high a limit factor really keeps the excessive contrast effects of LCE under control. No thresholding on the left, Threshold of 0.2 on the right.
Another Local Contrast sample, still at 8 diameter (256 pixels), but this time with the power cranked up to 2.0 -- the raw image on the left is virtually unusable. The image on the right shows that Thresholding of 0.4 simply can't help -- the power of a filter at this size is too great.
Adding in a limit value of 0.8 curtails the extreme nature of a high powered filter, keeping you from blowing highlights or shadows, while still leaving the "power" available for use by parts of the image that can use it to good effect. No thresholding on the left, threshold of 0.4 on the right.
Sharpie also allows you to blur at large diameters. This is useful for bringing back shadows and highlights in specific areas. Look particularly in the sample image how the shadows lighten up (and the highlights get darker) without changing the overall image feel. On the left, the almost unusable unthresholded/unlimited filter result. On the right, we've added a 0.15 threshold which helps restore a lot of detail, but still leaves the image quite murky.
With a Limit of 0.5 keeping the extremes of the effect from overwhelming the original image, we get much more usable results at higher powers. On the left, no thresholding -- still some detail loss. On the right, a bit of threshold is all it needs to "reduce contrast" without actually reducing contrast!