It can be different things depending on how you use it for the entity.
For instance..
EFFECTINCWATERLEVEL=X increase the level until height reaches FACTOR value
When FACTOR is set on the Triggerzone using the
raisewaterlevel.fpi in the
effects folder, then it sets the target for the increment to reach.
So, if I set the FACTOR on the triggerzone to 550, then calling the raisewaterlevel.fpi would cause the water to raise until it reaches that level.
So, in this case it sets a stopping point.
Most other actions use the FACTOR as a multiplier according to the FPI section of the manual.
I'm not too sure on how that works because I haven't played around with it, yet.
Maybe someone else can answer that one.