FAQ: What is Light Falloff?
Light Falloff settings allow you to mimic how light changes over distance to simulate real world lighting, to bring greater warmth and increased depth to the scene through softer shadows, whilst objects nearer the light source glow brighter.
Then and now
In earlier versions of Rhino, it was argued that the constant power of each light source was unrealistic. Rhino rebuts those criticisms with the new "Inverse Squared Falloff" setting. This effectively renders the reality of how light changes intensity over distance.