I can understand how it may be confusing, but it is an important to note that the fuzzy zone doesn't change the altitude limit of the shader, especially in this case where a non-zero value in the shader, no matter how small, could result in the placement of an object. If you adjusted the elevation and fuzzy width visually, you would risk getting objects placed below the desired altitude restriction. My example was only intended to demonstrate that non-zero values in the fuzzy zone did indeed extend all the way to the limit set even though the resulting surface looked to be a long way off.
If you are going to explain this to people I would only use one restriction at a time to avoid overlapping fuzzy zones.
The 2 images below compare a fuzzy zone of 200 (left) with a linear gradient (right). 3 colour contours: Red = min altitude, green = min altitude + 200, blue = min altitude + 5x200
The first image has a linear gradient of 1000m (attached TGD), matching Jo's explanation of approx 5x fuzzy zone to reach an opacity of 1. The second has a linear gradient of 200m. According to the graph in the wiki, the fuzzy shader has an opacity ~65% at the point where the linear gradient reaches 100%.