Foldback is a design feature that functions as follows. When overcurrent is drawn by the load, the supply reduces output voltage and current to well below the current limit. This approach has been used in power supplies and power amplifiers.
The prime purpose of foldback current limiting is to keep the output transistor within its safe power dissipation limit. An output transistor that can handle the power dissipation of supplying the current limit at the rated voltage will dissipate more power if it supplies the same amount of current into a short circuit, since the voltage drop across the transistor is greater. A simple current limit would therefore expose the transistor to risk of failure, or require a larger transistor. Foldback keeps the output transistor within its power dissipation limits under fault or overload conditions.
Foldback also reduces power dissipation in the load in fault conditions, which can reduce the risks of fire & heat damage.
Many power supplies employ simple current-limiting protection; foldback goes one step further by reducing the output current limit linearly as output voltage decreases.[1]