The USERBASED and HOSTBASED directives reserve a number of licenses (all or a specified number, as specified by the vendor) that will be available only to the named users (for USERBASED) or hosts (for HOSTBASED). The users or hosts must be specified by the end user in the reservation lists of the license server, or you will get a warning in the license server log indicating that the license is not available for usage.
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Making a license user- or host-based effectively makes it a "semi-floating" license, as you the end user must specify in advance who can use the license. This licensing model can be beneficial for such uses as applying a discount to floating licenses, since it places restrictions on the floating license but is not as rigid as a local license.
The LM-X end user must specify the users/hosts that can use the reserved licenses by setting the RESERVE keyword(s) in the license server configuration file; for example:
RESERVE_USER_F1_3 = User1 User2 User3
RESERVE_HOST_F3_2 = Host1 Host2