For example, your parts physical material is 316 Stainless. When your ready to do your CAM setups and select your type of cut, when you select your tool, 360 knows your cutting hard steel and highlights a cobalt tool for instance, or the range of tools that can be used with the physical material instead of showing a high speed steel bit. Wood or plywood would highlight router and downcut bits. Acrylic requires totally different bits, etc.
Simulation does this already in 360 to determine physical properties.