Sticking with the phrasing your using here is how I understand this
The horizontal weight mapping I described helps to smooth the cloth flow on the vertices between the left and right legs because each of those vertices are affected by both legs.
The closer the vertice is to the leg the more it is effected by that leg. The further the vertice is away from the leg the less it is effected. that's why it is smoothed.
The vertices in the middle, the ones set to .5 are affected by both legs equally. and then as you goto vertices towards a leg. those vertices get effected slightly more by one leg and slightly less by the other.
So now they are all effected smoothly a.
I realise that explanation is probably obvious to you but I am saying it because the vertical rig gradient your talking about does the same thing between each bone on that leg.
So, for example, If you need the cloth to flow smoothly between the calf knee and upper leg bones then you would need to do a similar thing like I have vertically for each of those bones more smoothly.
Sometimes I do that and that is why I said the way you rig and weight map depends on the clothing you are making. For a dress I find doing the vertical gradient to be unnecessary because the physics weight mapping smooths it out enough.
However, if you did do vertical gradients between the bones as well then I think the cloth flow would possibly work a bit better. But I don't think it makes much difference visibly on a dress.
I have studied reallusions method of rigging a dress. It seems that they do it so the rigging gradients are circular around each bone.
Here is a couple of images I took to help me with learning the best way to rig clothes
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