Similar to 2D Text Generate a text image with custom colors, font and justification. Read More , but as a shape.
This layer turns each letter into a shape. You can choose whether Smode applies Shape Modifier Modify a list of shapes Read More to the whole string or to individual characters:
If unchecked, a Shape Modifier Modify a list of shapes Read More will be applied to each character.
For instance a gradient fill color applied to a text:

... merged into a single shape

... not merged into a single shape

When you edit a text, Smode creates a group of Bezier A Bezier shape Read More (one for each character). "Closed" characters (like the letter 'O') are broken down into Group of shapes A group of shapes Read More .