The Distance filter is used to define a value for grid nodes that are beyond a user-specified distance from a control point. The value that is assigned to these points may be either "null" (a special value that means "nothing" - as opposed to zero), or a user-specified value such as zero.
Replacement Value: Either specify a specific value for the outlying nodes or click the “Set to Null” button to set the Replacement value to a Null value (-1.0e27).
Cutoff Distance (%): Enter here the distance beyond a control point, expressed as a percent of the project size, beyond which the grid nodes will be assigned a null or constant value.
Here's a map illustrating a grid set to a maximum distance filter of 40% of the project area.