The vault reserve holds emergency funds for each vault. When profit is harvested from the vault, a configurable share of this profit is sent to the Vault Reserve. These funds are not included in the APY calcs for the pool.
The vault reserve is used in the event that the vault suffers losses. In this event, the vault reserve will be used to recover the losses where possible. In the event that the vault reserve has excess funds. There is a function to allow withdrawing excess funds to the vault.
Vault.withdrawFromReserve(uint256 amount) external
Withdraws specified amount of underlying from reserve to vault.
amount: Amount to withdraw.
Withdraws from reserve will cause a spike in pool exchange rate. Pool deposits should be paused during this to prevent front running.