A lockout pin Basically gives you power down,
and maintains the height of the attached equipment you determined with the hydraulic cylinder, controlled by the lift/drop hand lever @ the dash.
So: say you have a blade on the front and have it set approx 2" above the ground, with the pin out so it can "float"
You can walk to the front and lift the blade up by hand ( yes it is a Bit heavy)
drop it, and it will return 2" above the ground.
Now if you have the pin installed, it is "locked" at the height of 2" you determined, so walking to the front and trying to lift the blade up you will be lifting the whole tractor up, as it is not allowed to "float"
I hope this makes it as clear as mud