It is used for building single thickness walls around an area, such as for a pen to keep your dinos in. One would first place an adobe fence foundation down, and then place a section of wall on top.
Fence Foundations can be placed directly on the ground and snap to foundations and other fence foundations. They can be snap placed at 45 degree angles.
If a foundation is destroyed, any building pieces that rely on it for support will be destroyed as well. If it was destroyed via the demolish option, no resources will be refunded for these extra building pieces.