This list manages the various groups of settings for the currently active tool. Actually each entry is really a special tool with its particular properties. In a similar way to a container holding coloured pencils, one can select individual "pencils" very quickly from this list in order to work with them in the picture.
You can quickly move the active entry in the list with the "Up\Down" buttons and thereby resort the list as desired.
For example you could put all the coloured pencils together in one part of the list and various markers in another.
The "New" button copies the active entry so that its settings can be adjusted separately to form a new tool. The "Delete" button removes the entry from the list.
All tool lists are saved together in a file when saving the module settings. This gives the possibility of loading new lists in addition to the old. You'll find more details in the description of the second command group.
