You specify the location level scope in the Limit Asset Import Scope panel. The location can be a site, a domain in case of Windows, or a database in case of SQL and Oracle. When you specify a scope at the location level, the asset import query returns the specified asset type from the specified location only. The folders, the asset groups, or the assets that are available for selection in the Select Asset Import Scope panel depend upon the location scope that you select here.
Assume that you want to import the Windows Files. You limit the scope to Windows Machine, which is default scope for the Windows Files. You select a folder as a scope that contains the Windows Machine and Windows Domain. In this case, the asset import query does not consider the Windows Domain as you have limited the scope to Windows Machine only.