The server and tools refer to the config/java.properties file for Java Virtual Machine (JVM) options that include important memory settings.
The java.properties file sets the default Java arguments for the server and each command-line utility includes the default <JAVA_HOME> path.
The java.properties file is generated at server setup time and defines memory-related JVM settings based on the user-provided value for max heap size if you selected the aggressive memory tuning option at setup. Most of the JVM options specified for both server and tools do not need customization after setup. The exception is the -Xmx/Xms options, which specify the maximum and initial JVM heap size. See Memory allocation and database cache for advice on tailoring the -Xmx/Xms values.
Other than altering the heap size of the server process (start-server) or command-line tools, the most common change required to java.properties is when you want to update the JVM version. A single edit applies the new JVM to all server and tool use.