Dreadnoughts and capitals are so huge that as some people have said nobody cares about the figures because almost everything will hit for max damage. Dreadnoughts have around 11,000m signature radius. Hehe
But for smaller ships their signature size and the booster you mentioned is useful -
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Smaller signature reduces the chance of getting hit with guns. Even if the target is stationary, as long as the attacker is moving around so that angular velocity is not 0.
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Smaller signature reduces missile damage even on a stationary target. (if missile explosion radius is larger)
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Smaller signature radius reduces the damage taken from bombs even on stationary targets. (if you radius is below 400m I think)
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Smaller signature means it takes longer to target lock you, which might give you a tiny fraction of time longer to try and run or activate hardeners, module etc. (depends on attacker’s sensors and how quick he locks you, because if it is too quick, the time difference you get from a small sig radius is negligible and not useful in this case)