When creating a new folder in the Documents module it inherits its permissions by default form the folder within which it was created (i.e. parent folder).
ADD VISUAL OF TOGGLE + GRID IN PERMISSION PANEL WHEN IMPLEMENTED
Example: If Folder X has this permission setting, then the new folders that are created in Folder X will by default get the same permission settings as Folder X has.
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When breaking the inheritance on a folder, it does no longer follow its parent permission settings. The user is free to set unique permission to this folder.
ADD VISUAL OF TOGGLE + GRID IN PERMISSION PANEL WHEN IMPLEMENTED
Breaking the inheritance makes the permission settings more complex and increasingly more difficult to manage. Therefor, we recommend to keep the inheritance to as a large extent as possible and what is reasonable for your organizations needs.