Optimized Fence Clipping
The Optimized Fence Clipping preference in the Operation category of the Preferences dialog is on by default. This preference enables you to maintain closed shapes, solids, and surfaces when clipping those elements that cross a fence boundary. If this preference is turned off, closed shapes, solids, and surfaces are dropped to linear elements when clipped.
You can also use this preference in conjunction with the Locate Interiors preference (in the Input category of the Preferences dialog) to create associative holes in closed shapes, solids and surfaces. When Locate Interiors is set to Always, fences that are located entirely within a closed piece of geometry can perform clip actions upon their section of the larger area.