Each application requires a fixed block in memory to open. A RAM Charged application is not limited to its starting size so it can often be smaller than the Preferred size, otherwise used. You would expect an application to open and function within what the author has defined as its minimum. Use of the Preferred size is useful for applications which do not often exceed their Starting memory size. Or for applications that often grow larger than normal, and thus might as well begin with their preferred.
Lower values help reclaim wasted memory.
On first consideration, you might think that there is no point in setting the starting memory size lower than the total memory required by the application, when first opened and sitting idle with no documents open. However, this is not always true. If you can set it lower, it will help reduce general problems due to fragmentation of unused memory into isolated blocks. Also, the smaller the starting memory size, the smaller the Largest Unused Block required in order to open the application. Finally, some applications might later use even less memory than they took when they first opened.