The bounding box wraps around your whole 3D model completely. This box is used to set the base size of the model when placing it in small scale and for interacting with it.
It is wise to be weary of lose geometry outside of the main model, a common case is for example some objects marking the origin of the model. If these are very far away from the main bulk of the model the bounding box is going to have to stretch far out to encapsulate this mesh, and this may have undesired consequences when interacting with the model.
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