Stencils Panel

Masks are essentially stencils. Stencils are used to specify an area for sculpting or texture painting with Brush depth and transparency.
Stencils use greyscale images to determine what is masked and what is not. Pure white (255,255,255) is allowed; pure black (0,0,0) is not. Grey colors in between will vary depending on the level of grey between black and white.

In conjunction with materials can be moved and rotated independently using the new navigation controls and can also be rotated precisely 45 degrees by using the SHIFT key.
If you choose to display a mask or material in at least one of the channels (Depth and/or, Color and/or Glossineess), a new panel shows up on top.

Stencil & Smart Material Preview Options

Preview Options

When activating one of the Smart Materials, Stencils, or both simultaneously, you’ll have a new panel on the screen.
This panel contains all of the editable functions for both Smart Materials and Stencils.

FAQ

Is there a way of painting with a stencil that will use the color info as well ?

Henry Townshend: That was my confusion as well at first. I always thought stencil projection should include color. But actually it does not in any software really. What you/we mean is “projection” painting. It is confusing in part of terms.
As you probably saw by now, you can use this in 3D Coat super easily, just create a new Smart Material and drag and drop a color image from your file explorer directly into your Albedo to have colored stencil, works even with non square images! And even automatically translates proper values from a single color image also for depth and gloss:

Video Tutorials

Intro to 3D Coat 016 – Sculpt Room – Stencils by Anton Tenitsky.

Quick Start: Stencils
The video demonstrates how you can Extract Bump Maps from Photos in 3DCoat 2021 (within the Stencils Preview Panel options), so that users do not need to prep them beforehand in an image editing application, such as Photoshop: Bump Map Extraction from Photo.