verstaerker:

what is the setting Utility:Source (Guitar,Bass…..) exactly doing?

It fine tunes the active frequency range of the algorithms for your particular instrument. If you select bass for example, in an algorithm with pitch tracking it will allow tracking of lower frequencies or in an algorithm with filters it might allow the filters to go to lower frequencies.  One of my colleagues will have to chime in on how this settings affect the individual ModFactor algorithms…