Creating a "Preset Favorite Lists" simply allows you to pre-define a favorite list for a specific client (via the email address). You can enter a list name, an optional description, and also limit the number of photos that can be added to this list.
When clients view favorites using this email address, they will see the list pre-created for them. They can add images to this list, and send them back to you when they are done.
How can I see what my client has favorited?
How does my client share or download his/her favorite images?
How does my client add a note or a comment on a photo?