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It's typically used to control water temperature. Let's say that you have a radiant zone, which requires 100-degree water. You have that set up as a loop with a circulator that works either continuously or just whenever the thermostat is calling.
Your boiler supplies ~180-degree water, and the zone valve is (in this case) modulated by a temperature sensor attached to the radiant loop. When the radiant loop is below 100 degrees, it opens the valve to inject a bit of hotter water.
Typically, what "modulating zone valve" means is that the electronics to do that sort of control have been attached directly to the zone valve, instead of being housed in a separate enclosure. So it really would not be ideal for being used in place of a standard zone valve.