Adobe AFTER EFFECTS 5.5 Help Manual page 269

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Collapsing transformations can preserve resolution when a nested composition is scaled
down and then scaled back up in successive compositions. Without collapsed transforma-
tions, a nested composition that is scaled down loses the resolution of its original larger
size. When you collapse transformations, the original resolution of a nested composition is
preserved; its final resolution is determined by its size within the composition that uses
collapsed transformations.
Default method When a nested composition is scaled down and then up again
in successive compositions, it retains the lower resolution of the scaled-down version.
Collapsed transformation When a nested composition is scaled down and then
up again in successive compositions, it retains the resolution of the original layer.
When you collapse the transform properties of a layer, all compositions nested inside it
combine their opacity setting with the opacity setting of the layer that uses collapsed
transform properties.
Because you can collapse transformations but not mask or effect properties, After Effects
automatically disables all composition and layer switches related to masks or effects when
you collapse transformations. If you click a disabled layer switch, After Effects prompts you
to turn off Collapse Transformations. You cannot turn on the Effect, Mask, Mask Feather, or
Motion Blur layer properties or apply transfer controls to a layer in which you collapsed
transform properties. You can still apply these properties to a composition nested within
the composition with transform properties collapsed, as long as the Collapse Transforma-
tions switch is not turned on for that composition.
When a layer contains an Adobe Illustrator file instead of a nested composition, the
Collapse Transformations switch for that layer becomes the Continuously Rasterize switch,
which you can use to improve the image quality of footage. See "Importing an Adobe
Illustrator, PDF, or EPS file" on page 35 and "Collapsing transformation properties" on
page 87.
Collapsing transformations also adds some flexibility when you work with 3D layers in
nested compositions. If you have a subordinate composition that has 3D objects within it
without Collapse Transformations, After Effects renders the composition as a 2D image of
the 3D arrangement in the higher composition. However, if you turn on Collapse Transfor-
mations, After Effects renders the 3D layers into the next higher composition so that they
retain their 3D relationships among themselves and with other 3D layers in the higher
composition. You can continue to manipulate the relative positions of the 3D layers from
the lower composition as a group.
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