The Polygons>Smooth>Reduce Noise command has three options to help optimize the operation for the type of model on which you are working.
Free-form shapes:If the point set represents a free form or organic shape, the operation reduces the noise with respect to surface curvature.
Prismatic shapes (conservative) and Prismatic shapes (aggressive): If you are working with a mechanical or prismatic shape, the operation helps keep features, such as edges, sharp.
See the related knowledge base entry: What do the three types of noise reduction mean in the Reduce Noise command?