By putting a longer iron shaft into a shorter iron, it will "soften" the flex overall.  For example, if you put a 7 iron shaft into an 8 iron (and cut it down to 8i playing length) versus putting an 8 iron shaft into the 8 iron, the 7 iron shaft in an 8 iron should play approximately 1/3 "softer" (more flex) than if you were to put an 8 iron shaft straight into an 8 iron.  This is done to dial in shaft flex for players who are in between flexes, for example if you're in between a S and X, you could get X flex shafts, and soft step once or twice.  The opposite can be done (hard step - take a 8 iron shaft and put into a 7 iron to achieve a stiffer flex) to S flex for example to achieve a flex in between S and X.