Apple Final Cut Pro 7 - Manual (Page 418)

If you choose Continue, a new, separate media file is created for each subclip. The original
media file that contained the contents of the entire tape is deleted. The subclips in your
project now refer to these individual media files. The subclips you originally selected
become clips in the Browser, as indicated by their icons. The subclips that you didn’t
process with the Media Manager are now offline because the original media file was
deleted.
From now on, when you need to recapture particular shots for any reason, you can capture
only the clips you need (instead of the entire duration of the tape).
418 Chapter 28 Creating Subclips