Apple Final Cut Pro 7 - Manual (Page 485)

• If you set a sequence Out point: The Out point of the source clip is placed at the sequence
Out point, and the clip is “backtimed” for the duration of the source clip, extending
from the Out point to the left.
Out point
The new clip ends at the
Out point that you set.
485 Chapter 33 Setting Edit Points for Clips and Sequences