Originally Posted by Hissing Cobra
BTC, the purpose of the 3rd hole closer is to reduce the amount of fertilizer that is coming out of the spreader when the deflector shield is in the "down" position. When it's in the "down" position the fertilizer that is normally thrown out the right side of the spreader is now being "re-directed" to the front and left side of the spreader, making those areas "heavy" with too much fertilizer. Early in the season this will result in deep, rich green coloring on the edges but if done during the summer heat, it will cause those edges to burn out. Closing the 3rd hole when the deflector is "down" allows for the front and the left side to continue getting the correct amount of fertilizer and you won't have those issues.
Closing the 3rd hole also works very well for anytime you want to reduce the rate you are putting down, Small tight areas that are less than your normal pattern with, or I even close it on heavy shaded parts of lawn.