BSDF stands for bidirectional scattering distribution function.
Essentially, it is a mathematical function that determines the probability that a specific ray of light will be reflected (scattered) at a given angle. This means that the light coming through the glass or shade will be scattered.The type of glass or shade determines the distribution function, which in turn determines how the light is scattered and how the material appears.
There are two ways of using a BSDF in the VE and it depends on what the BSDF is meant to model - if the BSDF represents a glazing system then it can be applied to a glass material. If it represents a blind or other device, it can be applied to a component that the user has created. The yellow button is used to create the BSDF for application as a modifier to the material surface.
Notes:
It is up to the user to provide their own BSDF data file (xml).
BSDF modifiers can only be used for glass materials.