The ArcGIS for AutoCAD project area defines the spatial limit for all the feature layers you add to your drawing. Only those features that fall within the defined project area are added to your drawing.
Keeping your project area small improves performance. If the project area is too small, you can still add the feature layer but few or no features may be drawn. A warning message appears regarding adding the layer when no features are found in the specified project area. If the project area is large, you may get an excessive number of features retrieved. You need to confirm whether you want to continue if the number exceeds a preset limit. A large number of features may affect performance.
The project area impacts web feature layers only. Map layers and image layers are unaffected.
When working with editable layers, if you draw features outside the project area, those new features are synchronized with the service but are not retrieved.