There are a few different ways to use this new feature and I'll post some screen shots to show you the differences between pasting with air and without air in a couple situations. First, to access this option either use your selection tool and drag a box around the object you wish to paste and hit Ctrl+C to copy and Ctrl+V to paste, or choose a previously saved template. Move the object near where you'd like to paste it and hold shift and left click. This will place the item in a temporary location with a small pop up window with some tweak options.
Use the directional and rotation options in the tweak panel to place the item exactly where you'd like and click the check mark on the tweak panel to place it.
So, assume you wanted to put a ring of some kind around an existing pillar like I have in the above photo. I want to put this outline of a square around a pillar. Leaving the "Paste Air?" check box checked this is what happens.
As you can see it cut a piece out of our pillar. The game thinks that the air in the center of the white square is voxels so it replaced our obsidian voxels in the pillar with invisible air voxels. You can go back and replace the voxels that were "removed" and it will look good as new, BUT what if our pillar wasn't just a plain old square pillar and had an intricate design that we spent hours creating. That might not be so easy to fix up. This is where the "no air" feature comes in. If we un-check the "Paste with Air?" box in the tweak mode panel we can place our white square without any damage to the black pillar.
Another use is for creating inlays. Imagine we want to make a butterfly with black circular spots on it. How would we get those spots? One way to start is to make a cube (I'll use a 3x3 for this demo)
Use the smooth tool on the entire cube until it looks like a ball
Use the selection tool to choose the middle 1 voxel section of the ball and copy it or save it as a template.
You now have a small circle you can copy and paste where you'd like.
So we head over to our butterfly and go to add the spots.
We copy and paste it using the tweak mode to get it just right, and then this happens.
As you can see it pasted the circular spot but also added those pesky air voxels in the corners. The pasting without air will fix this right up. You will instead get nice inlaid spots like the ones below.
I'm totally in love with this new feature because it makes inlays so easy. You can create whatever design you'd like, smooth it, and copy and paste it into a surface without issue.
Currently there is a bit of a bug with pasting without air when used with objects that have been smoothed down with the smooth tool. As you can see in the below picture the one pasted without air (on the left) has gone jagged in certain areas. Hopefully this will be fixed soon.