(Another) question on equipment settings

I've read through as many posts as I can and still am not sure of an answer.  My mash tun is a 48 quart Coleman, so volume - if I used the entire space - seems it would be 12 gallons.  But I don't use the entire space.  Why then is that number critical for calculations (why do I need it there) if I may only be doing an initial mashing of 3 or 4 gallons?

I just did an AHS Northern Brown Ale and attempted to place the information into Beersmith, but it does not appear to be cycling out what the directions had me doing.

Beersmith uses it to determine space needed for batch sparging.  The "% used" in mash profile also uses it.

It also matters for surface space, thermal volume and heat loss.  Kinda the same as the weight of the mash ton is figured into calculations.

Ding,ding,ding!  The light went on and I get it now.  I did adjust the percentage and it all falls into place.

Many thanks to both of you.