Clipping is a procedure that 'cuts' parts of the material based on a given texture. White/ Bright areas of the texture are kept while black ones are cut.
Texture: Select the image that will be used as clipping map.
Soft Clipping (Default): The soft option respects the alpha channel of an image and will use all the grey values to clip the material.
Hard Clipping: Combined with the threshold parameter, it is posibble to select which parts of the image will be used to clip the material.
Threshold: Setting the percentage very low, only total and some very dark ones will be 'cut'. Increasing it, brighter areas will be used for clipping. Setting the percentage to 100%, the whole material will be clipped, as even the total white areas will be considered as points of clipping.