The difference between '--max-args' and '--max-replace-args' in GNU Parallel?

According to the manual of GNU parallel, the difference between --max-args / -n and --max-replace-args / -N, is that the latter is Like -n but also makes replacement strings {1} .. {max-args} that represents argument 1 .. max-args.

--max-replace-args=max-args
-N max-args
    Use at most max-args arguments per command line. Like -n but also makes
    replacement strings {1} .. {max-args} that represents argument 1 .. max-args.

What does that actually mean? Does it mean that --max-args / -n would NOT interpret replacement strings {1} .. {max-args}? But the following test shows that the replacement strings {1} {2} {3} could be interpreted correctly:

$ parallel -n3 echo {3} {2} {1} ::: {A..F}
C B A
F E D

$ parallel -N3 echo {3} {2} {1} ::: {A..F}
C B A
F E D

So what's really the difference between the two?