This configuration controls how Splunk will forward events. In the vast majority of cases, this configuration exists on Splunk forwarders, which send their events to Splunk indexers. An example would look like this:
[tcpout] defaultGroup = nyc [tcpout:nyc] autoLB = true server = 1.2.3.4:9997,1.2.3.6:9997
It is possible to use transforms to route events to different server groups, but it is not commonly used as it introduces a lot of complexity that is generally not needed.