From Pinnacle Studio 23 User Guide:

"Using Smart Proxy for a faster, smoother editing experience The main purpose of Smart Proxy is to provide a more fluid editing and previewing experience when working with large, high resolution video files. Smart Proxy creates lower resolution working copies of larger source files. These smaller files are called “proxy” files. Using proxy files speeds up editing of high resolution projects (for example, projects that have HDV and AVCHD source files). Proxy files are source-dependent rather than project-dependent. In other words, proxy files can be shared among different projects. When you render a video project, the original, high-quality video source files are used. Multi-Camera Editing 269 You can use the Smart Proxy Manager to enable or disable Smart Proxy, change the default resolution threshold that enables Smart Proxy, and access the Smart Proxy File Manager and Smart Proxy Queue Manager to manage existing and future proxy files." 

What am I missing here?